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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. The average cost to replace a transmission, for example, is more than $5,000, so it’s essential to prepare yourself no matter if you have a new vehicle right off a dealership lot or if you have an old yet reliable used car.

One way to offset expenses like this and prepare yourself for unexpected repair costs is to buy additional coverage outside your average car insurance policy. 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 policies 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 policies, car repair insurance is provided by major car insurance companies. However, general coverage (like liability and collision) does not include a car repair policy. Instead, it must be purchased separately and is not offered by all providers. Additionally, car repair insurance has other restrictions. 

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 doesn’t offer any routine maintenance coverage, unlike Endurance’s Advantage auto protection plan. You’ll have comprehensive breakdown coverage AND up to $3,500 in regular maintenance services with this coverage, including essential services such as oil and filter changes, tire rotations, engine diagnostic exams, state safety inspection services and more.
  • 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 100,000 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 is in contrast to an extended warranty like Advantage that includes vital maintenance services, including several special, one-time services like a brake pad/shoe replacement, cooling system maintenance, a 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, typically, automaker coverage lasts for 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). Vehicle service contracts, sometimes referred to as extended warranties, 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, and the new owner can be riding 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: With the Advantage plan, you can get essential maintenance services included to help keep your car running trouble-free. That includes up to three oil and filter changes, tire rotations and more. Not only that, but regardless of the Endurance plan you purchase, you will automatically be eligible for a full year of Elite Benefits for just 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 or a commercial vehicle, or if you drive for a rideshare or delivery service, you can get covered with the Advantage protection plan. You can even remove mileage restrictions while finding coverage for seals and gaskets, tire height modifications, lift kits and more.

What Are the Differences between Car Repair Insurance and A Vehicle Service Contract?

How does car repair insurance compare to a vehicle service contract? Here’s a side-by-side look:

A comparison chart of an Extended Car Warranty and Car Repair Insurance.

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. And while car repair insurance can provide some coverage, like your original warranty coverage, this coverage won’t last forever, especially when it comes to older cars or high-mileage vehicles. Instead, an auto protection plan from Endurance can help. 

In addition to extra peace of mind from unexpected auto repairs and breakdowns, each Endurance plan is bolstered by several available benefits, including 24/7 roadside assistance, trip interruption coverage and rental car reimbursements. There is even the opportunity to enjoy a full year of Elite Benefits that includes up to two tire replacements or repairs, collision discounts and key fob replacements. 

With the Advantage plan, you can even save thousands in regular maintenance services, including vital services that include engine diagnostic exams and tire rotations, adding up to unmatched affordable vehicle protection and savings. Select luxury vehicles from Audi, BMW, Jaguar, Mercedes-Benz, Land Rover, Porsche and other top-tier luxury vehicle brands can also get coverage with the Highline protection plan. 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 online quote or call our award-winning care team directly at (800) 253-8203 to speak directly with one of our representatives to learn more about how an Endurance protection plan can help you. We’re also here to help make car shopping and vehicle ownership easier with the Endurance blog, where you can explore informative articles with make/model comparisons, DIY maintenance tips, and much more.  

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