Best Mechanical Breakdown Insurance

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Contributor, Benzinga
January 18, 2024

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Today’s vehicles are more complex than ever and repairs can be costly. Many households don’t have enough saved to pay for expensive breakdowns or mechanical failures when they happen. Mechanical breakdown insurance promises to keep vehicle repair costs under control, but which company should you choose?

Quick Look: Best Mechanical Breakdown Insurance

The Best Mechanical Breakdown Insurance Companies

Fewer insurers offer mechanical breakdown insurance than in the past, which has helped fuel the growth of vehicle service contract providers. Having two types of coverage to choose from is good for consumers and allows coverage for a broader range of vehicles.

1. Best Value for Money: Endurance (VSC)

Bolstered by a B+ BBB rating, Endurance is well-respected as a direct provider instead of a broker, as is common. Endurance isn’t an insurer. Instead, the company provides four levels of coverage designed to fit your needs and budget. You’ll get an option to spread your contract payment over up to three years. Payment options are more flexible than some other competitors and monthly costs can be more affordable. Every Endurance plan includes coverage for engine and transmission work, while step-level and premium plans expand the list of coverages to more areas of the car. New plan purchases include one year of free Endurance Elite Membership, which includes roadside assistance, member rewards and even tire replacement. Coverage is available up to 160,000 miles, which is lower than some competitors but higher than some well-known insurance providers.


  • Extended coverage
  • Cost savings
  • Convenience
  • Transferable


  • Lengthy claims process
  • Limited repair facilities

2. Best Customer Service: Carchex

Carchex is a vehicle service contract broker that specializes in matching consumers with the right service plan. As a broker, the company is only as good as the companies it aligns itself with. By all appearances, Carchex has chosen well, earning an A+ rating with the BBB. With five contract tiers and coverage options of up to 10 years, Carchex puts its focus on creating lasting value and providing more choices for consumers. Each contract tier features several top-rated service providers. Coverage length options make Carchex a good choice for owners of older vehicles as well, with a maximum mileage coverage limit of 250,000 miles.


  • Offers customizable plans
  • Large network of trusted repair facilities
  • Extensive coverage


  • Cost can be higher
  • Contracts not available in all states

3. Best for Claims: Mercury Insurance

Marketed as Mercury Mechanical Protection, Mercury’s mechanical breakdown coverage is a choice of four plans that can cover repair costs for up to seven years or 100,000 miles. Additional coverage benefits include roadside assistance, rental vehicle assistance which can help cover the cost of a rental car, road hazard tire protection and trip interruption coverage that can help pay for lodging if a breakdown leaves you stranded far from home. Platinum coverage through Mercury also includes a deductible reimbursement of up to $500 that can be applied to your Mercury auto insurance policy if you have a claim. Choose your own auto service provider with claims handled directly through Mercury, cutting out the middleman, which is common in vehicle protection plans.


  • Competitive rates
  • Multiple discounts available
  • Customizable coverage options


  • Limited online presence
  • Limited availability

4. Best for Roadside Service: AAA Mechanical Breakdown Coverage

You probably know AAA as a roadside service provider, an auto insurance provider or maybe even a travel company. The 117-year-old company is all of those things, but it also offers four levels of mechanical breakdown coverage which may cover major repairs for up to 7 years or 230,000 miles. AAA’s premium Exclusionary package mirrors many of the coverages your car had when covered by the factory warranty. 3 additional plans promise more affordable coverage and cover an expansive list of mechanical repairs. In all cases, engine and transmission repairs are covered.

Payments for your AAA contract can be spread out over two years without interest. While the company does charge a $100 deductible, choosing a preferred auto service provider can reduce the cost to $50 or even $0 in some cases.


  • Generally cheaper than extended warranties
  • May include additional benefits such as rental car reimbursement and trip interruption coverage


  • Limited to AAA members only, which may require an additional membership fee
  •  Pre-existing conditions or wear and tear may not be covered

What is Mechanical Breakdown Insurance?

Driving older cars can be a great way to make car ownership more affordable, but as the miles add up, the cost of repairs can outstrip your budget. Mechanical breakdown insurance (MBI) is a type of insurance designed specifically to cover breakdowns and mechanical failures, minimizing your out-of-pocket expenses at the repair counter and helping you get back on the road when your car breaks down.

Expect to pay a monthly or annual premium for your mechanical breakdown insurance. In exchange, your coverage can greatly reduce the cost of repairs. You’ll only be responsible for paying the cost of the deductible for covered repair claims.

Policy requirements vary, but in many cases, car repair insurance coverage is limited to vehicles with less than 100,000 miles and are less than 7 years old. Some insurers may extend the maximum mileage qualifications but expect a close range. Commonly, MBI coverage has to be started on a younger vehicle still under warranty.

Mechanical Breakdown Insurance vs Regular Car Insurance

Your auto insurance policy can cover a lot of things, from dents and dings to broken glass or even theft, but it doesn't cover wear and tear or mechanical failure.

The confusion between mechanical breakdown insurance and car insurance likely stems from the fact that the two types are often packaged together.

In some cases, you can purchase mechanical breakdown coverage through your insurer but the coverage is offered as a separate policy or as a rider on your auto insurance policy even if the billing is consolidated. Only a handful of car insurance providers offer mechanical breakdown insurance and some in the market have pulled their MBI policy product to focus on their core business.

Instead, many now offer less comprehensive roadside assistance programs that provide towing, jumpstarts, fuel delivery and similar services.

Ask your insurer about coverage and if there’s a discount for bundling, which is a popular way to lower car insurance rates.

Mechanical Breakdown Insurance vs Vehicle Service Contracts

There are also a number of companies that specialize in mechanical breakdown coverage, providing discounted service or no-charge repairs for a menu of mechanical issues. These products, which can be confused with insurance or even warranties, are neither. Some of the best-known names in the mechanical breakdown insurance market as vehicle service contracts (VSCs), which means they don’t sell insurance at all.

Vehicle service contracts provide a way to manage repair costs by purchasing a service contract. Some repair services may even be free to you and are paid by your coverage provider. One big advantage for owners of older vehicles is that VSC coverage can provide protection for up to 300,000 miles, depending on the provider. Most MBI policies stop providing coverage at about 100,000 miles.

Many VSCs utilize good/better/best tiers. The best tiers offer the most coverage or a lower cost of repairs in exchange for a higher monthly cost.

Though choosing one of these car repair insurance companies may mean one more bill in the mailbox each month, the advantages of using a company that specializes in mechanical breakdown coverage and which can cover older cars may be worth the minor inconvenience of an extra bill.

Mechanical breakdown insurance is also often confused with an extended warranty. While there are several similarities, mechanical breakdown insurance can only be sold through licensed insurers, agents or brokers. MBI coverage tends to cover more mechanical risks and is priced lower, but is targeted at newer cars. As with many other types of insurance, you’re only responsible for paying the deductible if you have an MBI claim.

Typically, an extended warranty sold through a dealer also requires a large upfront payment, often financed, whereas mechanical breakdown insurance is usually billed as a monthly premium. Another difference is that extended warranties may cover a smaller list of vehicle parts and systems.

What Mechanical Breakdown Insurance Covers

The types of repairs that are covered may be determined by the type and the level of the plan you choose. You’ll also find similar coverages offered by VSCs, which are technically not insurance, but function similarly to reduce the cost of mechanical repairs at the retail counter.

Some common coverages you might find with MBI or VSC plans include:

  • Roadside assistance or towing
  • Rental vehicle assistance
  • Trip interruption coverage
  • Coverage for parts and systems (transmission, engine, electrical, etc.)
  • Road hazard tire protection
  • Choose your own shop for repairs

It’s also important to note that mechanical breakdown coverage doesn’t cover wear items such as tires, brakes and shocks.

Breaking Down the Cost of Mechanical Breakdown Insurance

Mechanical breakdown insurance is typically quite inexpensive. However, most MBI policies must begin when the car is fairly new and still under warranty. This means you’ll probably be paying for coverage you won’t need for years. After the warranty expires, your MBI policy will be more useful.

Average Cost

Costs for mechanical breakdown insurance can vary based on the insurer you choose, type of vehicle and by location. Costs can range from as little as $30 per year up to $75 per year. Of course, there’s a deductible to consider as well. Expect to pay a deductible on covered repairs that can range from $100 to about $400. With the deductible, many smaller repairs won't be covered. For big repair jobs, a fixed cost of hundreds beats a bill for thousands.

For vehicle service contracts, the contract is priced differently. You’ll be able to choose from a number of plan types, ranging from basic coverage to comprehensive. The cost of the contract can usually be split into monthly payments for up to 3 years.

If you keep the car until the contract expires due to mileage, expect to pay between $0.01 per mile up to $0.05 per mile for your contract, but bear in mind that you’ll pay for the contract over a shorter period.

Factors That Change the Cost

For true insurance products, the difference in cost between one insurer and another or the difference in cost to insure different vehicles is only a few dollars per month in many cases. However, these policies have to be purchased when the vehicle is fairly new and some expensive-to-repair vehicles won’t be eligible for coverage. The deductibles are often fixed, as are the covered services, which leaves little to no room to make adjustments that can affect your premium.

For vehicle service contracts, you can expect a wider range of pricing based on the age of your vehicle and the type of contract you purchase. Expect contracts that cover expensive repairs like engine replacements or transmission replacements to be more expensive.

Remember, too, that your industry, the manner in which the device is used and your location can affect the price. Prices change based on the location because the litigious nature of some states can make coverage more expensive. At the same time, some industries or use cases are, put simply, riskier and more expensive.

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Choosing the Right Mechanical Breakdown Coverage

Fewer insurers now offer mechanical breakdown insurance. However, extended warranty companies and vehicle service contract companies are rushing in to fill the gap.

For owners of newer cars who don’t expect to keep their cars for longer than 100,000 miles, an insurer like GEICO may be the best choice. For more seasoned vehicles or for those who expect to keep their vehicles longer, a vehicle service contract company may be the best choice because of the lower cost per mile.

Check reviews and BBB ratings before you make a decision. Some well-known companies have questionable customer service records. You’ll have your coverage for as long as you own your car, so do your research.

Frequently Asked Questions


What services does mechanical breakdown insurance cover?


It covers the brakes, transmission, electrical system issues and wear and tear.


Do you need mechanical breakdown insurance for older vehicles?


Buying mechanical breakdown insurance on an older car is a smart choice. 


Does Mechanical Breakdown Insurance have a deductible?


Yes, similar to other insurance policies, MBI usually has a deductible. The deductible is the amount that the policyholder is responsible for paying before the insurance coverage kicks in.