Is your vehicle’s warranty about to run out? Then, you might be considering purchasing either an extended warranty or Mechanical Breakdown Coverage. However, you might be confused about which one is the better option. We’re here to help you figure out the best type of coverage for you and your car. Understanding the differences between Mechanical Breakdown Coverage and an extended warranty will bring you that much closer to having peace of mind on the road.
What is an Extended Warranty?
An extended warranty is usually offered by your manufacturer as an extension to what was originally offered when you first purchased your vehicle. It is sold at an additional cost, and typically must be purchased before your basic warranty expires.
What are the Benefits of an Extended Warranty?
There are two types of coverages offered under an extended warranty.
- Powertrain Warranty – This covers your engine and transmission against defects in workmanship.
- Bumper-to-bumper Warranty – This covers major components under the hood, as well as navigation systems, power seats, onboard computers and possibly other electronics in your vehicle.
Those benefits sound great, but there are often times a lot of exclusions and limitations in the fine print. You may be limited to where you can get your car repaired. Additionally, it’s usually required that you maintain your car regularly and use the recommended type of gas for your vehicle. If you don’t service your car within the recommended guidelines, then your repair may not be covered. You should also keep in mind that an extended warranty is tied to a deductible.
What is Mechanical Breakdown Coverage?
Mechanical Breakdown Coverage provides essentially the same type of coverage offered in an extended warranty, but with added benefits. As the name implies, this coverage is intended to insure you against the costs of a major mechanical breakdown of your vehicle. It covers you if your vehicle breaks down or its covered parts wear out. Basically, the coverage provider will take care of the costs of any covered repairs.
What are the Benefits of Mechanical Breakdown Coverage?
Some of the added benefits of Mechanical Breakdown Coverage include:
- Coverage Flexibility – Most extended warranties are one-size-fits-all, take-it-or-leave-it contracts. With Mechanical Breakdown Insurance, you can select the level of coverage you want. For example, you can opt to insure just the powertrain of your car to save some money. You can also choose to add this coverage for additional components like your vehicle’s air conditioning, power windows and door locks.
- Repair Shop Options – Some extended warranties only allow you to repair your vehicle at a dealership. Mechanical Breakdown Coverage allows you to take your car to any licensed repair shop so that you can choose the one closest to your home or office.
- Payment Plans – An extended warranty may require a lump sum up front. However, a Mechanical Breakdown policy can be paid monthly, semi-annually or annually just like your Car Insurance policy. Coverage will be provided as long as your account is in good standing.
- Deductible Options – You can choose what deductible you want. The higher your deductible the less premium you pay, and vice versa. You may also have a $0 deductible option.
- Roadside Assistance – Services like 24-hour roadside assistance, towing and tire road hazard insurance may be included in your Mechanical Breakdown policy.
- Ownership Transfer – A Mechanical Breakdown policy is transferable between owners. So, if you sell your vehicle, the coverage goes with it. This can add resale value to your car.
- More Benefits – Rental car reimbursement and trip hazard interruption insurance may also be included under Mechanical Breakdown Coverage.
How Much Does Mechanical Breakdown Coverage Cost?
Another significant benefit of Mechanical Breakdown Coverage is that it’s usually much more affordable than a manufacturer’s extended warranty. According to Value Penguin, the average initial cost of an extended warranty is $1,214 for a three-year plan. The average cost of Mechanical Breakdown Coverage is between $180-450 over an average of six years. That’s a pretty significant difference if you ask us!
Read the Fine Print
Regardless of which option you choose, it’s essential that you read the fine print before signing anything. Ensure that you understand any conditions or limitations within your policy so that you know what it is covered and what is not. This will also help you determine if an extended warranty or Mechanical Breakdown policy is right for you and your vehicle.
If you have more questions about Mechanical Breakdown Coverage, call an Insurance Specialist at (855) 919-4247. Not only will you receive a free quote, but we can answer all your questions. You can also learn more about the policy we offer here.
This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here. Such policy will be governed by the language contained therein, and no warranty or appropriateness for a specific purpose is expressed or implied.