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What’s the Difference? An Extended Warranty vs. Car Repair Insurance

BY: Adam Karner
Two car mechanics checking a vehicle's brakes while it is on a lift.

The ability to hop in a car and drive to or from wherever you’d like is the ultimate when it comes to convenience and personal freedom. It’s an unmatched experience that’s been around for more than a century. But, while owning a car can bring about plenty of new places to go and things to see, there’s more to it than just purchasing a vehicle, such as staying up-to-date on maintenance or handling mechanical issues and related repairs.

For example, the average cost to replace a transmission is more than $5,000. So it’s essential to prepare yourself whether you have a new vehicle right off a dealership lot or an old yet reliable used car.

One way to offset expenses like this and prepare for unexpected repair costs is to buy additional coverage outside your average car insurance contract. However, while coverage in the form of an extended car warranty or car repair insurance may sound similar, they have significant differences. To help better protect yourself and your vehicle from costly car repairs, it’s essential to understand the key differences between these two types of coverage.

What Is Car Repair Insurance?

Car repair insurance is a form of auto insurance coverage that only protects a vehicle against mechanical failures. Sometimes called mechanical breakdown insurance (MBI), its coverage is separate and different from other contracts you may have on your car, such as:

  • Liability, Collision, and Comprehensive Insurance: This coverage protects against losses due to an accident with another vehicle or object.
  • GAP Insurance: Guaranteed Asset Protection (GAP) covers any difference between the cash value of a totaled or stolen car and a loan balance.

Like standard auto insurance contracts, car repair insurance is provided by major car insurance companies. However, general coverage (like liability and collision) does not include a car repair contract. Instead, it must be purchased separately and is only offered by some providers.

Additionally, car repair insurance has other restrictions and is only available in certain states. For example, California only offers mechanical breakdown insurance for cars because it helps to protect drivers from the costs of repairs if their vehicle is damaged due to a mechanical failure. This type of coverage is not available in all states, but California has prioritized ensuring drivers have access to coverage for mechanical breakdowns.

These can include:

  • Covers Only Major Repairs, Not Maintenance: Car repair insurance only covers repairs for major components like the engine or transmission. Trouble with secondary systems, such as having issues with power windows or suspension, means you’re on your own. Furthermore, car repair insurance usually doesn’t offer routine maintenance coverage like oil changes.
  • Newer Cars Only: Depending on the company, car repair insurance is usually restricted to new cars or late-model vehicles with no more than 15,000 miles. In addition, coverage is typically no longer available once a car is seven years old or has 150,000 miles (when problems are more likely to occur).
  • Redundant Coverage: Car repair insurance takes a back seat to factory warranty coverage. So, even if you’ve purchased car repair insurance, service work is first handled via any existing original bumper-to-bumper or powertrain warranty coverage. This contrasts with an extended warranty, which can include vital maintenance services, including several special, one-time services like brake pad/shoe replacement, cooling system maintenance, battery replacement, and more.

If you own a vehicle that does not have a manufacturer’s warranty, car repair insurance, or an extended auto warranty, you would be left on the hook when paying any repair bills. For example:

What’s an Extended Car Warranty?

While a factory warranty can provide excellent coverage for specific car repairs, it’s important to remember that it won’t last forever. For example, automaker coverage typically lasts 3 years/36,000 miles to 5 years/60,000 miles. Some luxury brands are usually covered for 4 years/50,000 miles, while others can extend as long as 10 years/100,000 miles. Some manufacturers may provide additional bumper-to-bumper terms or extra protection for the powertrain. But, at some point, regardless of how long the initial warranty coverage was, it will end. When that happens, purchasing an extended car warranty can provide much-needed peace of mind.

However, while you can often purchase an extended warranty right from your automaker (though your factory coverage may still have to be active), you can also find help in vehicle service contracts (VSCs) or auto protection plans. Vehicle service contracts act as an extended warranty from your automaker but are issued from third-party providers like us at Endurance. But, regardless of what you may call them, a vehicle service contract protects against unexpected repairs and expenses after the manufacturer’s warranty expires and those not covered by your car insurance or car repair insurance.

Car owners concerned about surprise repair bills often ask, “are extended car warranties worth it?” And for many, the answer is yes. For example, a vehicle service contract from Endurance offers numerous advantages, including:

  • Flexibility: While no VSC can give you complete coverage like a bumper-to-bumper factory warranty, you can still find comprehensive plans that protect vital components like the engine and transmission. The Endurance team will also work with you to find the perfect plan to fit your needs and budget, helping to ensure you get the coverage (and peace of mind) you’re looking for.
  • Convenience: An Endurance protection plan lets you choose where you’ll have covered repairs performed, meaning you can go to your certified repair facility or ASE Certified mechanic of choice.
  • Transferability: Adding an Endurance auto protection plan to your car makes it more valuable and appealing as most Endurance plans are transferable, which can be helpful when selling your vehicle. Just pay a small transfer fee and follow a few simple instructions, then the new owner can ride with the security of Endurance protection.
  • Confidence: Sometimes, breakdowns are unavoidable, no matter how well-maintained your vehicle is. But Endurance customers are prepared for the unexpected as every plan includes 24/7 roadside assistance, trip interruption coverage, and access to alternate transportation.
  • Premium Services: Each Endurance plan is automatically eligible for a full year of Elite Benefits for a small activation fee, including tire repairs, key fob replacement, total loss protection, and more.
  • Expansive Eligibility: Whether you own a salvaged or rebuilt title vehicle, a Canadian Grey Market vehicle, a commercial vehicle, or if you drive for a rideshare or delivery service, you can get covered with an Endurance auto protection plan. You can even remove mileage restrictions while finding coverage for seals and gaskets, tire height modifications, lift kits, and more.

Why Endurance Is the Right Choice for Protecting Your Vehicle

Unexpected car repairs can be expensive, but no longer having your manufacturer’s original warranty doesn’t have to leave you unprotected. Car repair insurance (or mechanical breakdown insurance) can provide some coverage like your original factory warranty. Whereas an auto protection plan or extended warranty can help with mechanical failures – especially for older cars or high-mileage vehicles.

No matter which type of coverage you need, extra peace of mind from unexpected auto repairs and breakdowns is worth it. Endurance plans are bolstered by several available benefits, including towing, trip interruption, and rental car reimbursements. And most Endurance plans are transferable, meaning you can help upsell your vehicle to any potential buyers should you ever look to sell it.

Don’t wait to protect your car from unexpected breakdowns and repairs. Request a free quote by calling our award-winning care team at (800) 253-8203. Speak directly with one of our representatives to learn how Endurance protection can help you – or shop online to find your perfect plan.

We’re also here to help make car shopping and vehicle ownership easier with the Endurance blog. Explore informative articles with make/model comparisons, extended warranty tips, DIY maintenance lists, and much more.

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