Man calling for help because car broken down

Does Auto Repair Insurance Provide Enough Coverage?

Featured Extended Warranty Companies

We reviewed the best extended auto warranty providers, and here are our top picks.

Best Overall Warranty Provider

Our Rating: 4.6 out of 5.0

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(866) 990-3410

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Affordable Monthly Payment

Our Rating: 4.5 out of 5.0

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(877) 265-5123

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Best Warranty Provider for Used Cars

Our Rating: 4.4 out of 5.0

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(866) 950-7122

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Best Claims Process

Our Rating: 4.3 out of 5.0

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(888) 565-3010

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  • If you’re looking for ways to further protect your vehicle, read this helpful guide first.
  • Auto repair insurance or a similar option like an extended warranty might be a good fit.
  • Learn about extended warranty providers who offer flexible, affordable coverage for your vehicle.

Automoblog and its partners may be compensated if you purchase the products mentioned in this article.

As a car owner, you want to protect your vehicle from mechanical issues or breakdowns that happen as it ages. Your regular car insurance policy generally only covers repairs after an accident – not the repairs due to normal part failures that happen over time. However, there are insurance programs specifically for non-accident car repairs, called auto repair insurance.

Auto repair insurance, much like an extended warranty, covers the breakdowns and mechanical failures that happen as a result of normal driving habits. Different car repair insurance and service contract providers offer multiple levels and types of protection for your car.

This guide will help you determine if purchasing car repair insurance is the right choice for extending your vehicle’s life. We’ll also explain alternatives to auto repair insurance like the best extended car warranty companies.

What Is Auto Repair Insurance?

Car repair insurance is a service offered to fix minor and major mechanical failures due to normal wear on your car. Depending on your provider, there may be several different levels of coverage available.

Quick Facts: Auto Repair Insurance

  • Who offers it? Most auto repair insurance is offered through insurance agencies as an add-on service to your existing car insurance policy. You’re more likely to find it offered by larger insurance companies. Companies may offer repair insurance as a rider to your existing policy or as a separate plan completely. For example, several state branches of AAA provide car repair insurance plans, while other AAA branches offer extended warranty options instead.
  • Best use: Repair insurance is best if you’re driving a newer or low-mileage car and want to make sure an unexpected breakdown is covered.
  • Average cost: Repair insurance generally costs between $50 to $1,000 a year, depending on the age of your vehicle, mileage, and level of repair insurance.
  • Deductible cost: Most deductibles are between $100 to $300, so minor repairs won’t be covered.
  • Pros: Since auto repair insurance is usually offered as a rider or add-on policy for your existing car insurance, you’ll be dealing with just one company.
  • Cons: Car repair insurance often has restrictions on mileage or age of the vehicle, making higher mileage cars more expensive to insure. Many repair insurance providers don’t offer coverage for older vehicles, meaning you’ll only have it when your vehicle is newer and less likely to need repairs.

How Does Auto Repair Insurance Work?

Car repair insurance works similarly to an extended warranty with a few limitations. Coverage for certain parts of your vehicle will be specified by your provider and the plan you choose. When you’re faced with a breakdown or mechanical failure, you contact your repair insurance provider to file a claim.

Filing a claim is an important part of the repair insurance process because it allows you to ask for pre-authorization for your repairs. Once your claim has been approved by the insurance provider, you can go to an authorized mechanic for the repair.

two mechanics

Extended Auto Warranties Offer More Options

When it comes to long-term protection for your vehicle, an extended car warranty from a third-party warranty company gives you better coverage options than car repair insurance. An extended warranty is a service contract that offsets the cost of auto repairs due to regular use. It’s different than a manufacturer’s warranty, which normally only covers mechanical breakdowns from faulty factory parts or workmanship.

Quick Facts: Third-Party Extended Warranty

  • Who offers it? Extended warranties are available through third-party companies such as CARCHEX who specialize in these service contracts.
  • Best use: Extended warranties from third-parties are great for almost any vehicle because they offer many levels of protection. They’re especially great for older or high-mileage vehicles.
  • Average cost: Costs vary depending on your car’s age and mileage. Third-party warranty companies usually offer a range of plans and pricing options, so you should be able to set up your extended warranty to meet your budget.
  • Deductible cost: Your deductible depends on your service contract, but most are between $50 and $100, with options for $0 deductible.
  • Pros: You can get a third-party extended warranty anytime in a variety of coverage options. This allows you to protect an older car or one with higher miles. Since cars with higher mileage are more likely to need repairs than brand-new ones, it makes more sense to have an older vehicle covered. You’re much more likely now than in the past to have a car last well over 100,000 miles and want to protect it. You also won’t be locked into using your dealership for repairs and can choose a plan that offers more protection than a dealer’s extended warranty.
  • Cons: Unlike auto repair insurance, you won’t be using one company for all of your protection needs. However, as long as your extended warranty provider is a reputable company with positive customer reviews and highly rated customer service, this shouldn’t be a problem.

Comparing Auto Repair Insurance Coverage

No matter what type of policy you choose, it’s important to understand what’s covered under your plan. Before you sign, you should get a sample contract from your provider that tells you exactly what is and isn’t covered.

Most car repair insurance plans cover some combination of the following:

  • Brakes
  • Exhaust
  • Steering
  • Drivetrain
  • Heating and cooling
  • Engine parts like the water pump

Extended warranties usually provide either bumper-to-bumper coverage – comprehensive coverage with a few listed exclusions – or powertrain coverage, which protects the powertrain and related components. The best extended warranty companies offer several plans for each type of coverage, as well as some in the middle. The variety ensures you protect the vehicle systems that you would like to protect and aren’t stuck paying for unnecessary coverage.

Endurance: Best Overall

Endurance is a leading extended car warranty provider that been in the industry since 2006. It’s known as one of the most trusted companies in the nation and was included in the 2019 Inc. 5000 as one of the fastest-growing privately-held businesses in America.

Based on our review of Endurance as an extended auto warranty company, here are a few things we like:

  • The claims process is simple and clear.
  • Most plans offer transferability and cancellation if needed.
  • Endurance offers a full refund 30-day money-back guarantee.
  • You won’t have to wait for reimbursements, as repair services are paid for directly by Endurance.
  • Warranty coverage is clearly stated online through easily accessible sample contracts, which list exclusions and fine print.

For a free, no-obligation quote, use the tools below. If you’d like to learn more about this provider, our Endurance review has all the details.

Best Overall

Our Rating – 4.6 out of 5.0

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(866) 990-3410

Industry veteran that handles your plan directly, from quote to claim

CARCHEX: Best for Used Cars

CARCHEX is a reputable car warranty company that provides protection plans for almost any vehicle. Check out some of the most important benefits CARCHEX has to offer:

  • Wide range of coverage options: CARCHEX has five levels of coverage with up to 16 contracts available from suppliers. Some coverage options protect your car for up to 10 years. These plans are backed by top-rated insurance companies, including Royal Administration Services and American Auto Shield. If you decide to cancel your coverage, CARCHEX offers a 30-Day Money Back Guarantee.
  • Top-rated customer service: With a ThoroughlyReviewed score of 10.0 and an A+ BBB rating, you know you’re getting service from a reliable company. CARCHEX promises a No-Haggle, Low-Price, Everyday Guarantee™, which means they’ll start with the lowest price available.
  • Flexible payment options: Some extended warranties make you pay up front, but CARCHEX offers payments in monthly installments. The range of plans means you can choose a contract that meets your budget and is more manageable than a costly repair bill.
  • Go to your trusted mechanic: Unlike dealer warranties and auto repair insurance, CARCHEX allows you to go to the repair shop of your choice. They’ll pay repair fees directly to the shop, so you don’t have to wait to be reimbursed.
  • Additional perks: All CARCHEX protection plans come with 24/7 roadside assistance, as well as towing, rental cars, gas delivery, and trip interruption services.
You can read a direct comparison between Endurance and CARCHEX in our Endurance vs. CARCHEX review.


Best for Used Cars

Our Rating: 4.3 out of 5.0


Get Quote

(866) 950-7122

Top-rated provider with unmatched customer service and affordable coverage

Is Car Repair Insurance Worth It?

For some drivers with new vehicles, this type of insurance may be worth it. However, many of the covered repairs on a new car will already be covered under a manufacturer’s warranty. This would make your repair insurance an unnecessary expense. You can check the reliability ratings on your new car to help determine if it’s likely to need repairs in the first few years of use.

Generally, reliable cars that are new or have low miles are not good candidates for repair insurance. As these cars age, an extended warranty likely offers better coverage and more cost-effective protection. You can add the extended warranty once the manufacturer’s warranty has expired and continue protecting your vehicle for years to come.

Extended vehicle protection from CARCHEX is a good value for used or high-mileage vehicles. Find out how much coverage will cost for you.

Other Alternatives To Car Repair Insurance

Auto repair insurance and extended warranties can be easily confused – not to mention, there are several other types of protection plans as well. These other protection plans offer coverage in addition to what’s covered by your insurance policy. Take a look at some of the most popular services to protect your wallet from inevitable car repair costs.

Manufacturer’s Warranty

A manufacturer’s warranty is a guarantee made by your car manufacturer when you purchase a new car. Manufacturer warranties usually last between three to five years or 36,000 to 100,000 miles. They only cover breakdowns and repairs for defective parts on your vehicle.

  • Who offers it? Auto manufacturers provide warranties on new cars sold through dealerships.
  • Best use: Protect your shiny new car from unexpected damage from a faulty part or manufacturing.
  • Average cost: Manufacturer warranties are included when you purchase your new vehicle.
  • Deductible cost: Some manufacturer warranties have a deductible and some do not. These deductibles are normally between $50 and $100. Read your warranty for specific information on your vehicle.
  • Pros: This is an included service when you purchase a new car that helps you repair defective parts.
  • Cons: Manufacturer warranties are usually short-lived and only cover defective or faulty parts and labor, not mechanical problems from normal wear.

Dealership Extended Warranty

If you purchase a car from a dealership, the sales team will likely offer you the chance to purchase an extended warranty. Extended warranties, or vehicle service contracts, are different from manufacturer warranties. They cover different repairs for your vehicle, including those needed due to normal wear and tear. Often, an extended warranty goes into effect after your manufacturer’s warranty expires.

  • Who offers it? At the time of purchase, dealerships provide an option for extended warranties. Extended warranties through dealerships may also be called vehicle protection plans and branded for your car manufacturer, such as Ford Protect Extended Service Plans.
  • Best use: An extended warranty from a dealership may be a good choice for anyone looking to protect their new car after the manufacturer’s warranty expires. However, purchasing a protection plan directly from the dealer isn’t always the best choice for coverage.
  • Average cost: Dealers tend to mark up the cost of extended warranties. Instead of giving you the cost of your service contract, the dealer will show you your total monthly price and simply include the cost of the warranty with other fees and payments, such as financing payments. Ask for an itemized cost breakdown to get the exact cost of a dealership’s extended warranty. Most manufacturer protection plans cost between $1,000–$1,500 annually.
  • Deductible cost: Deductibles for dealer protection plans are usually between $0 and $250. Zero-dollar deductibles are only available for plans with the highest pricing.
  • Pros: You’ll be able to purchase your extended warranty at the same time you buy your car and can usually roll the service contract payments into your financing payments.
  • Cons: Extended warranties from dealerships limit you in repair options. Most require you return to the dealership for any covered repairs. This can be a challenge if you move after buying the car or can’t get an appointment when you need something fixed. Additionally, many dealer extended warranties offer less coverage than auto repair insurance.

Vehicle protection plans from third-party extended warranty companies offer the same or better coverage options than your dealer’s extended warranty. They also tend to be more flexible, as you can use your preferred repair shop and aren’t required to have repairs made at the dealer’s service center. In addition, a third-party extended warranty usually can be purchased at any time. This means you can wait until your car ages and is more likely to need repairs before committing to a service contract.

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Mechanical Breakdown Insurance

Mechanical breakdown insurance (MBI) is a type of car repair insurance that usually offers coverage for mechanical failures. Almost all mechanical breakdown insurance plans are only available for new cars and can then be renewed for up to a certain mileage.

  • Who offers it? As with most auto repair insurance, mechanical breakdown insurance is offered by insurance companies as an additional service to your regular policy. Popular insurance company GEICO offers an MBI program for policyholders.
  • Best use: You have a new car and want protection in addition to the manufacturer’s warranty.
  • Average cost: Mechanical breakdown insurance tends to cost less than other car repair insurance plans due to its limited coverage and low mileage requirements. Expect to pay anywhere from $50 to $200 annually.
  • Deductible cost: Deductibles for mechanical breakdown insurance are similar to other repair insurance services – in the range of $100 to $300.
  • Pros: Mechanical breakdown insurance is great for peace of mind when you purchase a new car and are worried a mechanical issue won’t be covered by the warranty.
  • Cons: You usually have to buy mechanical breakdown insurance when your car is new. GEICO, for example, requires your car to be less than 15 months old and have less than 15,000 miles to purchase MBI. You may also have more limitations on the types of repairs covered.

Keeping Your Car In Good Shape With Regular Maintenance

No matter what type of vehicle protection plan you choose, none of them will cover repairs for cars that aren’t maintained. This includes every type of protection – from regular insurance and mechanical breakdown insurance to manufacturer warranties and third-party extended warranties. Take a second to look over your owner’s manual at the recommended service intervals for things like a timing belt or flushing the transmission fluid. In addition to long-term maintenance responsibilities, you should follow a routine maintenance schedule. This includes checking your tires for tread wear and air pressure and changing the oil.

The Car Care Council has a simple schedule for checking the fluids and parts of your car. Following proper maintenance recommendations not only extends the life of your car but helps ensure your claims aren’t denied due to neglect.

What’s more, ignoring your illuminated engine light and refusing to take your car to the shop to avoid a potentially expensive repair can be problematic. Continuing to drive with an existing problem can lead to worse, more costly issues. Having a protection plan like an extended warranty gives you peace of mind and eases your fear of taking your car to a mechanic.

Our Methodology

Our expert review team takes satisfaction in providing accurate and unbiased information. We identified the following rating categories based on consumer survey data and conducted extensive research to formulate rankings of the best extended auto warranty providers.

  • Affordability: A variety of factors influence cost, so it can be difficult to compare quotes between providers. Our team performs ongoing secret shopper analyses for different vehicles, mileages, warranty plans, and locations to give this rating.
  • Coverage: Because each consumer has unique needs, it’s essential that a car warranty company offers an array of coverage options. We take into account the number of plans offered by each provider, term limits, exclusions, and additional benefits.
  • Industry Standing: Our team considers Better Business Bureau (BBB) ratings, availability, and years in business when giving this score.
  • Customer Service: Reputable extended car warranty companies operate with a certain degree of care for consumers. We take into account customer reviews, BBB complaints, and the responsiveness of the customer service team.
  1. When you’re an informed consumer, you can make the right decisions to get your vehicle repaired after your collision.

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