Car repairs can become a great load on your wallet. Especially when it’s something major like a failed transmission or a damaged engine. That is the point where mechanical breakdown insurance can save your money as well as time.
If you’re thinking about, “What is mechanical breakdown insurance?”, that is a very genuine concern. Many people don’t know about it.
It’s a lesser-known option in the car insurance world. But, this could bring big financial relief when your car’s most vital systems fail unexpectedly.
In this guide, we’ll break down what mechanical breakdown insurance is, how it works, what it covers, how much it costs, who offers it etc.
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What Is Mechanical Breakdown Insurance?
Mechanical breakdown insurance (MBI), sometimes called mechanical insurance or car mechanical insurance, is a type of optional policy you can add to your auto insurance.
It helps you to cover the cost of repairs for mechanical and electrical failures of your car that aren’t caused by accidents or minor routine damage. Think of it like a more flexible and often cheaper version of an extended warranty, but sold through an insurance company.
Unlike your standard car insurance policy that only pays for damage from collisions, theft, or weather, MBI steps in when things like your engine, transmission, or steering system break down unexpectedly.
What Does Mechanical Breakdown Insurance Cover?
MBI covers repairs for the internal components of your car, not maintenance, and not body damage.
Here’s what’s usually covered:
- Engine
- Transmission
- Drive axle
- Suspension
- Steering
- Heating and air conditioning
- Exhaust and emissions systems
- Internal electronics (like GPS or onboard computer systems)
This type of insurance mechanical breakdown policy, is designed to protect you from the high costs of repairing essential parts when they fail without warning.
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Not Covered:
MBI does not pay for:
- Oil changes
- Tuneups
- New tires
- Brake pads or spark plugs
- Damage from accidents (that’s for regular car insurance)
- Cosmetic damage or wear and tear
Therefore, although the mechanical breakdown insurance will not help with your next oil change, it will definitely help if your car’s AC suddenly stops working, or even worse, if your car’s transmission locks up.
Is Mechanical Breakdown Insurance Available for Used Cars?
Yes, but there are certain types of limits.
Mechanical breakdown insurance for used cars is typically available if your car is still relatively new or has low mileage. For example:
- Geico offers MBI only for cars that are less than 15 months old and under 15,000 miles.
- Progressive provides MBI for vehicles that are under 100,000 miles and not older than 15 model years.
- Mercury Insurance has options for both new and used cars, which is rare.
So, if your car is some years old or is about to reach 150,000 miles, you may not be able to qualify for most breakdown insurance policies. But, mechanical warranties from third parties may still be an option for you.
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How Much Does Mechanical Breakdown Insurance Cost?
Good news, mechanical breakdown insurance is usually much cheaper than an extended car warranty.
Let’s break down the average costs:
| Type of Coverage | Term | Annual Cost | Total Cost |
| Mechanical Breakdown Insurance | 7 years / 100,000 miles | $30 – $100 | $210 – $700 |
| Extended Warranty | 3 years / 35,000 miles | $819/year avg | $2,457 – $3,000+ |
MBI is generally more budget-friendly. This makes it a smart option for drivers who want peace of mind, and that too without the high upfront cost of a full mechanical warranty.
Plus, MBI often also includes deductibles between $100 and $250. That is the amount you can pay out-of-pocket per claim.
Mechanical Breakdown Insurance vs. Extended Warranty
They may seem similar, but they have key differences:
MBI is usually a better deal if your car is new and eligible. You pay less and still get good coverage for big repairs.
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| Feature | MBI (Insurance) | Extended Warranty |
| Sold By | Insurance companies | Car manufacturers or dealers |
| Cost | $30–$100/year | $1,000–$4,600 total |
| Deductible | Yes ($100–$250) | Usually no deductible |
| Payment Type | Monthly or annually | Often paid upfront |
| Shop Choice | Any licensed repair shop | Often limited to networks |
| Eligibility | Low-mileage, newer cars | Varies, sometimes more flexible |
When Should You Buy Mechanical Breakdown Insurance?
Here’s when car mechanical insurance makes the most sense:
- Your car is new (under 15,000 miles)
- You don’t have an extended warranty
- You can’t easily afford a surprise $2,000 repair
- You want more complete financial protection
Let’s say you’ve paid $300 in premiums over three years. Your transmission fails, and the repair quote is $2,000. With a $250 deductible, you pay a total of $550, saving $1,450. That’s how insurance mechanical breakdown coverage pays off.
But if your car is older, already covered by a warranty, or you have savings for emergencies, you may not need it.
Pros and Cons of Mechanical Breakdown Insurance
Pros:
- Covers big repairs not included in basic car insurance
- Costs less than a mechanical warranty
- Works like regular insurance, pay as you go
- Let you choose your own repair shop (in most cases)
Cons:
- Limited to newer, low-mileage cars
- Doesn’t cover maintenance or wear-and-tear
- Some policies have high deductibles
- May duplicate coverage if you already have a warranty
Best Companies Offering Mechanical Breakdown Insurance
Looking for quotes? Here are some top providers:
Geico
- MBI available for cars under 15 months/15,000 miles
- Covers all systems and parts
- Can use any licensed repair shop
- Renewable for up to 7 years/100,000 miles
Progressive (Good Sam Plan)
- Available for vehicles under 100,000 miles and 15 years old
- Deductibles from $100 to $500
- Coverage for cars, trucks, and RVs
Mercury Insurance
- Available for new and used cars
- Includes extras: roadside assistance, trip interruption, tire protection
- Must contact an agent to add it
AAA, Allstate, American Family
- Some offer MBI as part of extended protection plans
- Availability and pricing vary by location
Always compare quotes to find the best car breakdown insurance for your vehicle and budget.
Is Mechanical Breakdown Insurance Worth It?
That depends on:
- Your car’s age and mileage
- Whether you already have a warranty
- Your financial ability to handle surprise repairs
If your vehicle is newer, you want peace of mind, and you’d rather not shell out thousands unexpectedly, mechanical breakdown insurance is worth considering.
But if your car is covered by a factory warranty or you’re financially ready for a repair emergency, you might be better off skipping it.
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Final Thoughts…
Mechanical breakdown insurance can be a lifesaver when something expensive breaks under the hood. It offers budget-friendly coverage for some of the most costly repairs drivers face, and it fills a gap that regular auto insurance doesn’t cover.
If your vehicle qualifies, it’s smart to compare quotes and see if adding mechanical auto insurance makes sense for your needs.
It’s all about protecting your car and your wallet from the unexpected.
