Congratulations! You’re the proud owner of a brand new (used) car. Getting those keys to your new set of wheels is big moment in every adult’s life. Now that you have a new car, you probably want to do everything you can to keep it running at its peak throughout its lifetime.
In fact, we’re betting there was a tense moment in that little finance office at the dealership when you couldn’t make up your mind whether to purchase the extended manufacturer’s warranty that was offered to you alongside all of the little extras. Perhaps you did go ahead and purchase it to ensure that your car would be well-maintained and in excellent shape for years to come. If so, that’s great!
However, if you declined the up-front extended car warranty payment to your dealership, you still have a chance to prepare for issues that may arise in your car’s future. There’s an alternative option that some people may not even know about, and it’s called mechanical breakdown insurance.
What is Mechanical Breakdown Insurance?
First of all, let’s begin by saying that mechanical breakdown insurance, or MBI, is not intended to be a replacement for traditional auto insurance and that you certainly need to be an insured driver with adequate coverage for comprehensive, collision, and liability.
This traditional insurance that you’re already well-acquainted with covers any damage to your car that is incurred via collision or theft, but doesn’t cover any repairs or part replacements due to normal wear and tear on your vehicle. That’s where mechanical breakdown insurance comes in: it allows you to make repairs on your car and even replace parts that are unable to be fixed, all for a relatively low monthly premium payment and a reasonable deductible.
How is MBI Different From an Extended Car Warranty?
So now you’re probably thinking, “OK…that sounds exactly like the extended auto warranty they offered me at the dealership. What’s the difference?”
Most used car buyers search for “extended auto warranties”. Extended warranties are actually either Mechanical Breakdown Insurance (in California) or a Vehicle Service contract (in the rest of the USA). No matter which state you live, be sure to check out olive.
While it’s true that there are a number of similarities between MBI and an extended car warranty/vehicle service contract- for example, both mechanical breakdown insurance and extended manufacturer’s warranties cover repairs and part replacements caused by normal wear and tear- there are also some pretty significant differences to consider before you choose one over the other.
For example, while an extended car warranty is paid upfront in a lump-sum payment at the time of purchase, a mechanical breakdown insurance policy works just like your traditional auto insurance: you’re making a monthly premium payment, which can be a lot easier on your wallet! Additionally, you’re able to cancel your MBI policy at any time if you feel it isn’t working out for you or you don’t find it necessary. Try getting your money back on an extended car warranty after you’ve already paid it to the dealership! It’s not easy.
Another difference between an extended car warranty and mechanical breakdown insurance is the variety of choices you have when it comes to where to take your vehicle for repairs. If you want to be able to use your warranty, you will need to take your car to a dealership that sells your make of vehicle every single time you need something fixed. Now, that’s not always an issue for a vehicle owner- in fact, many people prefer to bring their cars to the service department of their dealership for everything, down to an oil change.
However, other drivers have a strong preference for other auto repair centers due to brand loyalty, convenience, or affordability, and don’t want to say goodbye to their mechanic just because they’ve purchased an extended car warranty.
With mechanical breakdown coverage, drivers can bring their vehicles to any auto repair shop they choose, which can add a whole other level of ease, convenience, and value to their lives. Mechanical breakdown coverage gives you the authority to choose which auto technician works on your car, which is something that can make a big difference in the life of a vehicle owner.
Of course, there are some things to research about MBI prior to purchasing a policy through your insurance provider. For example, some mechanical breakdown insurance policies are only available on new vehicles, meaning cars that are less than 1 year old or have fewer than 15,000 miles on them. Other policies cover used vehicles but require you to start coverage within 21 days of purchasing the car. Be sure to find out all the specifics about your insurance provider’s MBI policy so you can choose the one that best fits your situation.
Whether you purchase an extended car warranty or opt for mechanical breakdown insurance, it’s always a good idea to make sure you’re prepared for the unexpected car problems that may come your way. We know it’s hard to picture while you’re still inhaling that delicious new-car smell, but there may come a day when you are faced with a breakdown that results in costly repairs, so it’s important to plan ahead. Either of these two options- mechanical breakdown insurance or an extended car warranty- may help save you money- not to mention a lot of auto-related headaches- in the long run.