Mechanical Breakdown Insurance vs Extended Car Warranties

The world of extended warranties and service plans can be a confusing place to wade through. Plans have different names and companies offer different products and services, so it’s easy to become frustrated with having to sort through it all. Mechanical breakdown insurance is a term you’ll likely hear along the way, but it’s not as different from an extended warranty as its name implies. Let’s dive in and take a look at what mechanical breakdown insurance is, and how it works.

What is Mechanical Breakdown Insurance?

Mechanical breakdown insurance, or MBI, is nearly the same thing as an extended warranty, but is typically cheaper and offers more payment flexibility than traditional extended warranties. Many MBI plans offer the ability to pay monthly and allow plan holders to choose the repair facility, where many extended warranty companies require customers to take their vehicle to a shop within their network of approved service providers.

Typically, MBI plans are required to be purchased while a vehicle’s factory warranty is still in effect. Companies like Geico offer MBI plans that extend out to six or seven years or 100,000 miles.

What is an Extended Car Warranty?

Extended warranties function much in the same way that a vehicle’s factory warranty does, protecting the owner from costly financial outlays as a vehicle ages. To be completely accurate, these warranties should be called vehicle service contracts or vehicle protection plans, but the basic concept is the same either way.

What is the Difference Between The Two?

Functionally, MBI plans and extended warranties are almost the same. MBIs tend to be less expensive and tend to offer more flexibility in terms of payment options and monthly payments.

What is the Cost of Mechanical Breakdown Insurance?

MBI plans tend to be less expensive on a regular basis, but may carry a higher deductible or service cost. Cars with higher values may not be eligible for coverage under an MBI, but a plan for more mainstream vehicles could cost anywhere from $30 to $100 per year, and deductibles range from around $200 to $500 or more.

What is the Cost of an Extended Warranty?

Extended warranty giant Endurance says that a typical plan costs around $4,000, but notes that it offers flexible payment plans and does not require the entire sum to be paid up front. Your costs could vary wildly depending on the vehicle you drive, so it’s important to check with your warranty provider.

When to Consider Mechanical Breakdown Insurance

You should consider MBI if you own a newer vehicle without tons of miles that is still covered by its factory warranty. Keep in mind that if you own a high-value vehicle, such as a Tesla Model S or BMW X7, you may not be able to purchase an MBI.

When to Consider an Extended Car Warranty

You should consider buying an extended warranty if your vehicle is out of its factory warranty coverage period. You can typically purchase an extended warranty at almost any time, but be aware that you shouldn’t wait until there’s a problem to start your search.

To learn more on this topic, you can check out our Extended Warranties Insider’s Guide and our top picks for the 10 Best Extended Warranties in the industry today.

Car Talk's Top Rated Extended Warranty Companies

4.9 of 5

CARCHEX is one of the largest, most highly-rated providers of vehicle extended warranties in the market. They have been a trusted name in the business for 20 years.

4.9 of 5

autopom! is well known in the industry for customer service and responsiveness. The company works directly with 2600 certified repair facilities and has a dedicated customer advocacy program.

4.3 of 5

Toco Warranty Corporation is a relative newcomer in the industry, but they are making a splash. They maintain a solid reputation with an A+ rating from the Better Business Bureau. Toco is known for offering affordable plans with no down payment and the ability to pay in monthly installments.

4.3 of 5

Mercury Insurance Company has been in business since 1961. They offer a variety of products to insure everything from your car, to your business. Their extended warranty offerings are known as ‘mechanical protection’ plans.

4.1 of 5

Concord Auto Protect has great reviews and is one of the only companies to have ASE certified technicians available when filing claims. Roadside assistance, towing and rental car options are available with every plan they offer.

3.8 of 5

Endurance Extended Car Warranty company is one of the most popular and trusted providers in the business. Endurance coverage is accepted at any dealership and at any ASE-certified mechanic, and features a 30-day money back guarantee.

3.7 of 5

Protect My Car offers extended warranties for a variety of vehicles and conditions. This provider maintains solid positive reviews due to their customer service and flexibility. Their warranty offerings are also transferable and refundable.

2.7 of 5

CarShield is a company that offers an aftermarket warranty on your car, truck, crossover, or motorcycle. The reviews for this company vary widely, with some questionable practices coming to light, so we suggest researching them fully, and strongly consider the alternatives available.


Ally Extended Car Warranty is one of the most reputable warranty companies in the business. Ally is a recognized, legitimate company that trades on the New York Stock Exchange, and it’s part of one of the country’s largest financial institutions.


EasyCare has been in the industry for over 30 years and maintains a positive reputation for its car warranty products, an A+ rating with the Better Business Bureau and rideshare and commercial coverage.


Zurich Insurance Group is one of the longest-running and largest insurance companies in the world. The company was founded in 1872 in Switzerland. Zurich policies are highly regarded and maintain an A+ BBB rating. However, they are only available through dealerships when purchasing your vehicle.


Route 66 has been in the warranty business for over 33 years. Their contracts are fully insured and backed by Assurant Solutions and they provide coverage throughout the United States. Their policies are offered only through financial institutions.


If you’ve got an FCA vehicle, which means Chrysler, Dodge, RAM, Jeep, Alfa Romeo or Fiat, you should seriously consider a Chrysler Warranty Direct policy. They are a direct provider, they utilize only OEM parts and all work is performed at FCA dealerships by trained technicians.


This protection plan is a great idea for GM vehicles such as Chevrolet, Buick, GMC, and Cadillac. The GM plan can extend the coverage of your vehicle by up to 10 years. What sets them apart from the competition is this plan is a true extension of the original warranty provided by General Motors.

See all warranty providers »


Do I need mechanical breakdown insurance if I have a warranty?

Mechanical breakdown insurance can help once your factory warranty has ended, but must usually be purchased before factory coverage expires.

Should I buy mechanical breakdown insurance?

MBI plans and extended warranties are typically worth it, at least from a financial standpoint, for a narrow set of drivers. However, if either provides you with the peace of mind you need to drive stress-free, the purchase can be worth its weight in gold.

What is mechanical breakdown insurance coverage?

MBI plans are basically the same thing as extended warranties, but cost less and offer more flexibility in payment options.

Does insurance cover mechanical failure?

Traditional auto insurance does not cover mechanical failure, though some insurance companies offer extended warranties. Auto insurance is intended to cover damage caused by collisions, accidents, and other issues.

Can a car be totaled due to mechanical failure?

If you’re unlucky, you may face a situation in which your repair bill exceeds the value of your car, but your auto insurance company won’t total the vehicle because of it. Insurance only covers damage and accidents, so mechanical issues are your responsibility.

Editor's note and disclaimer: Car Talk is supported by our fans, readers and listeners. When you click on some of the links on our website, we may receive referral compensation. However, you should know that the recommendations we make are based on our independent editorial review and analyses.
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