Purchasing insurance for car repairs, or mechanical breakdown insurance, can be a great way to budget for the unforeseen costs of car ownership. But is insurance for car repairs better than an extended warranty? And how do they compare with standard auto insurance?

In this review, we’ll dive into the advantages and disadvantages of mechanical breakdown insurance versus vehicle service contracts and explain when you’ll need to use your standard car insurance coverage instead. We will also recommend a few of the best extended warranty companies that could help make the cost of car repairs more affordable.

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How Does Insurance for Car Repairs Work?

Insurance for car repairs could save you hundreds or even thousands of dollars in the event of a mechanical breakdown. If a certain part of your vehicle fails, there’s a good chance repairs will be covered under a comprehensive mechanical breakdown insurance (MBI) policy.

MBI policies are backed by insurance providers and are therefore regulated by state governments. But unlike standard collision or bodily injury policies, no state laws mandate that drivers must have insurance for car repairs.

Here’s a guide to help you understand when you should use standard car insurance or mechanical breakdown insurance when you need vehicle repairs:

Use Standard Insurance for Car Repairs If… Use Breakdown Insurance for Car Repairs If…
Your car is damaged in a collision. Your vehicle is damaged due to mechanical problems.
A part of your vehicle is damaged due to an extreme weather event like a flood, lightning, or an environmental condition. Your vehicle breaks down and you need roadside assistance or towing services.

What Is the Best Insurance for Car Repairs?

An MBI policy may seem like a great option for your vehicle protection. However, there are a few barriers that may prevent you from getting coverage. Few providers offer insurance for car repairs, and those that do may only offer these policies for newer, low-mileage cars.

Insurance companies that offer insurance for car repairs include:

  • AAA
  • Allstate
  • Geico
  • Liberty Mutual

Geico mechanical breakdown insurance is one of the best choices on the market. It’s an exclusionary plan that covers the majority of vehicle parts, and it can extend up to 7 years or 100,000 miles, whichever comes first. If you’re a Geico policyholder, it may be a good idea to add insurance for car repairs—but you’ll only be eligible if your vehicle is less than 15 months old and has fewer than 15,000 miles.

The American Automobile Association, or AAA, also offers insurance for car repairs. There are a number of tiered plans to choose from, and terms can range from 1 month/1,000 miles to 7 years/230,000 miles, depending on your needs and location. AAA eligibility limits are much higher than Geico’s: Vehicles may be covered if they’re less than 15 model years old and have fewer than 150,000 miles on them.

Extended Warranties vs. Insurance for Car Repairs

Although they offer similar vehicle protection, there are many differences between extended warranties and insurance for car repairs.

One major difference is that extended warranties tend to offer more flexible and more comprehensive coverage than mechanical breakdown insurance policies. However, this comes at a higher price. Our research shows that extended car warranties tend to cost between $600 to $1,000 per year of coverage, but the Wall Street Journal reports that MBI policyholders only pay about $75 per year.

Additionally, extended warranties can be bought at any time in your vehicle’s life, whereas mechanical breakdown insurance must be purchased when your vehicle is relatively new. Warranties can also be canceled at any time for a prorated refund. MBI, on the other hand, is neither transferable nor refundable.

Both extended car warranties and insurance for car repairs can be financed over a number of months or years, and with either coverage, repairs can be completed at any licensed repair facility, including dealerships. Further, neither MBI nor extended warranties cover routine maintenance or normal wear and tear.

Whether you choose to buy an extended warranty or mechanical breakdown insurance, both guarantee peace of mind on the road to know your finances are protected against the cost of expensive unforeseen repairs.

Top Recommendations for Extended Car Warranties

If you’re interested in getting insurance for car repairs, we recommend also looking into an extended warranty from one of our top providers. We evaluated each major provider in the warranty industry and found Endurance and CarShield to be among the most reputable extended car warranty companies on the market.

Endurance: Best Coverage

Endurance provides the industry’s best direct extended car warranty coverage. With comprehensive benefits and extensive mechanical repair plans, Endurance may be the best vehicle protection plan for you.

Endurance offers drivers six coverage options to choose from:

  • Supreme: Exclusionary coverage
  • Superior: Comprehensive stated-component coverage
  • Secure Plus: Mid-tier coverage with the shortest waiting period
  • Secure: Affordable powertrain coverage
  • Select Premier: Specialty coverage designed for high-mileage vehicles
  • EnduranceAdvantage™: Covers mechanical breakdowns as well as maintenance

Endurance extended warranty benefits come free for each customer’s first year of coverage through the Endurance Elite Benefits program. These benefits include:

  • Roadside assistance
  • Key fob repair/replacement
  • Total loss protection
  • Up to two tire repairs/replacements per year
  • Collision discount
  • Endurance mobile app

Learn more about the provider in our complete Endurance warranty review, and get a free quote to see how much you would pay for coverage.

Our rating: 4.6 out of 5.0
Endurance is our pick for best coverage with its comprehensive warranty options.

CarShield: Best Value

We recognized CarShield for having the Best Value Warranty around. The company has flexible financing options and low-price, high-quality coverage.

CarShield offers customers five plans for cars:

  • Diamond: A bumper-to-bumper plan that provides the best coverage for new cars
  • Platinum: A comprehensive stated-component plan that provides the best coverage for high-mileage vehicles
  • Gold: An enhanced powertrain plan that provides the best coverage for drivers of unreliable vehicles
  • Silver: A basic powertrain plan that provides the best coverage for drivers on a budget
  • Aluminum: A specialty plan that provides the best coverage for cars with high-tech components

Benefits that come with all CarShield extended warranties include courtesy towing, emergency roadside assistance, and rental car reimbursement.

You can read more about this provider in our full CarShield review. To find out what an extended warranty from CarShield would cost for your vehicle, get a personalized quote below.

Our rating: 4.2 out of 5.0
Our research found this provider to be the most affordable. Plus, it offers monthly plans.


Our review team prides itself on sharing accurate and unbiased information with consumers. We have accumulated data from dozens of extended auto warranty companies to formulate our rankings of the industry’s best providers. Companies receive a score out of 5.0 overall, as well as a rating in each of the following categories:

  • Price: Comparing providers can be difficult due to the many factors that influence cost. To determine this score, we employ a secret shopper analysis using different vehicles, mileages, warranty plans, and locations.
  • Coverage: A wide variety of coverage is essential to support the differing needs of customers. We take into account the number of extended car warranty plans available, term limits, exclusions, and additional benefits.
  • Customer Service: The level of customer service and care provided by an extended warranty company is an important consideration. Our review team sifts through customer reviews and complaints from reputable sources such as the Better Business Bureau (BBB) and Trustpilot. We also consider the responsiveness of each company’s customer service team based on our secret shopper analysis.
  • Reputation: Good extended warranty providers consistently provide quality experiences. Our team takes into account BBB ratings and the company’s history of reliable service when giving this score.
  • Transparency: Customers value a commitment to open and honest communication when it comes to vehicle service contracts. Our team of experts takes into account the availability of money-back guarantees and sample contracts.