Car breakdowns are an unwelcome surprise, often accompanied by hefty repair bills. When faced with unexpected car trouble, the cost to fix it can sometimes run into thousands of dollars. This article from the Car Repair Online experts will delve into the details of auto repair insurance, specifically focusing on how much is car repair insurance per month, what it covers, its value, and whether it’s a worthwhile investment for you. We aim to provide a comprehensive guide to help you understand this insurance option and make informed decisions.
Cheapest Car Insurance Companies Average Cost of Car Insurance Cheapest Car Insurance Companies Cheapest Liability-Only Car Insurance Temporary Car Insurance 10 Largest Car Insurance Companies in the U.S. How To Buy Car Insurance Online
Decoding Auto Repair Insurance: What Is It?
Auto repair insurance, also known as mechanical breakdown insurance (MBI), is an optional add-on to your standard car insurance policy. It’s designed to cover the costs of unexpected mechanical repairs to your vehicle, offering financial protection when major components fail. Think of it as a safety net against significant repair bills for parts like your engine, transmission, or drivetrain.
Typically, auto repair insurance is targeted towards newer vehicles with low mileage. Eligibility often requires your car to be less than 15 months old and have fewer than 15,000 miles. If you’ve recently purchased a new or near-new car and haven’t opted for an extended warranty, auto repair insurance is definitely worth exploring.
It’s important to note that if you already have an extended car warranty, mechanical breakdown insurance might be redundant as they serve a similar purpose. While both offer protection against repair costs, they differ in eligibility, coverage limits, and, importantly, price. Generally, how much is car repair insurance per month is less compared to the cost of an extended car warranty, but it usually comes with stricter vehicle age and mileage limitations and potentially slightly less comprehensive coverage.
How Does Mechanical Breakdown Insurance Operate?
Car repair insurance functions much like any other type of car insurance coverage. It’s an added layer of protection you activate when needed. Like other insurance types, it involves a deductible, which is the amount you pay out-of-pocket before the insurance coverage kicks in.
You can usually add car repair insurance to your existing auto insurance policy, provided your insurer offers it. Some companies, like Progressive, also offer it as a standalone product.
Let’s illustrate with an example:
- You purchase car repair insurance and choose a deductible of $250.
- A year later, your car’s transmission fails, and your mechanic quotes an $8,000 repair bill.
- You file a claim with your car repair insurance, pay your $250 deductible, and your insurance covers the remaining $7,750 for the transmission replacement.
Considering that how much is car repair insurance per month averages around just $100 per year, the potential savings can be substantial. Unless you have a significant emergency fund readily available, car repair insurance can provide peace of mind, ensuring you don’t have to incur debt to handle major, unforeseen vehicle repairs.
Comparison of car repair insurance and extended warranty regarding eligibility, coverage limits, and cost.
Auto Repair Insurance Compared to Extended Warranties
Car repair insurance shares similarities with extended car warranties but key differences exist in vehicle eligibility, coverage scope, and cost, including how much is car repair insurance per month versus extended warranty monthly payments.
| Feature | Car Repair Insurance | Extended Car Warranty |
|---|---|---|
| Vehicle Eligibility | Typically for vehicles under 15 months old & < 15,000 miles | Available for older, higher-mileage vehicles (sometimes up to 300,000 miles) |
| Coverage Limits | Often longer than standard warranties (e.g., 7 years/100,000 miles with Geico) | Manufacturer warranties often around 6 years/75,000 miles |
| Cost | Approximately $100 per year (for a 7-year plan) | Median cost around $2,458 for a 3-year plan, significantly higher monthly cost |
Another crucial distinction is where you purchase these protections. Auto insurance companies are the primary providers of car repair insurance. Extended car warranties, on the other hand, are commonly sold by car dealerships, often at the time of purchase or as the original warranty nears expiration. However, extended warranties can usually be purchased from dealerships at almost any point.
What Exactly Does Auto Repair Insurance Cover?
Auto repair insurance is designed to cover significant mechanical breakdowns affecting your car’s core systems. It generally includes protection for malfunctions or failures in these major areas:
- Air conditioning and heating systems
- Drive axle
- Emissions system
- Engine
- Exhaust system
- Steering system
- Suspension
- Transmission
It’s critical to understand that this coverage is only applicable when breakdowns occur due to mechanical failure, not accidents or collisions. Damage resulting from accidents falls under collision coverage.
What’s Not Covered by Mechanical Breakdown Insurance?
Auto repair insurance is not a substitute for routine car maintenance. It will not cover expenses related to regular upkeep necessary to keep your car running smoothly, such as oil changes or tire rotations.
Specifically, car repair insurance typically excludes coverage for:
- Fluid replacements and top-offs
- Brake pad replacements
- Filter replacements (air, oil, cabin)
- Tire replacement or rotation
- Spark plug replacements
Furthermore, roadside assistance and towing services are generally not included in car repair insurance. These services are usually covered under emergency road service (ERS) coverage, which is often a separate add-on to your car insurance policy.
Delving into the Cost: How Much is Car Repair Insurance Per Month?
Understanding how much is car repair insurance per month is crucial for budgeting. While policies can range from as low as $30 to $100 annually, it’s reasonable to expect to pay around $100 per year, or roughly $8 to $9 per month, for this coverage. For a 7-year policy, this would total approximately $700.
The primary factor influencing the policy cost, and consequently how much is car repair insurance per month, is your chosen deductible amount. Most insurers offer deductible options between $100 and $500. Opting for a higher deductible will result in a lower monthly or annual premium.
Cost range for auto repair insurance policies per year.
Is Auto Repair Insurance a Worthwhile Investment?
Deciding whether auto repair insurance is a good investment depends on your individual financial situation, vehicle type, and risk tolerance. Consider these key factors when making your decision:
Financial Considerations
Firstly, evaluate your financial capacity to handle a major car repair expense without resorting to debt. Secondly, assess if you can comfortably afford the additional monthly cost for this insurance for peace of mind. If you can manage the monthly expense of auto repair insurance but would struggle with a large, unexpected repair bill, then this coverage might be a valuable safety net for you.
Risk Assessment
It’s important to acknowledge that there’s always a chance you might not need to use auto repair insurance. Newer vehicles and brands known for reliability are less prone to breakdowns, especially in their early years. However, if you prioritize the security of knowing you’re protected against unforeseen mechanical issues and breakdowns, even for a relatively small monthly premium, then auto repair insurance could be a worthwhile investment for you.
Vehicle Reliability Evaluation
Modern vehicles are generally more reliable than older models, but mechanical failures can still occur. Certain vehicles are also known to be more susceptible to breakdowns or specific types of mechanical problems. Researching the reliability history of your specific vehicle make and model can provide valuable insights to help you decide if this coverage is a prudent choice.
Vehicle Reliability and Typical Repair Costs
Resources like RepairPal offer reliability ratings and average repair costs for various vehicles. According to RepairPal data, here are some of the most reliable car brands on the market:
| Brand | Reliability Rating | Average Repair Cost |
|---|---|---|
| Honda | 4 out of 5 | $428 |
| Acura | 4 out of 5 | $501 |
| Kia | 4 out of 5 | $474 |
| Hyundai | 4 out of 5 | $468 |
| Mazda | 4 out of 5 | $462 |
| Lexus | 4 out of 5 | $551 |
| Toyota | 4 out of 5 | $441 |
| Nissan | 4 out of 5 | $500 |
Auto Repair Insurance: Frequently Asked Questions
Here are some common questions and answers about auto repair insurance:
What exactly is auto repair insurance?
Auto repair insurance, often referred to as mechanical breakdown insurance (MBI), is an optional car insurance coverage designed to help cover the costs of repairing mechanical failures in your vehicle. MBI covers major mechanical components like the engine and transmission when they fail due to mechanical issues, not accident damage. Accident-related mechanical repairs are covered by collision insurance.
How much does towing typically cost?
The average cost of a tow truck is around $109, but this can vary depending on factors such as the time of day, distance of the tow, and the type of tow truck required.
On average, how much is car repair insurance per month?
Auto repair insurance can range from $30 to $100 per year, with the average annual cost being approximately $100. This translates to a monthly cost of roughly $8 to $9.
Our Methodology
Car Insurance Methodology
To ensure objectivity and accuracy, Car Repair Online employs a comprehensive rating system for ranking car insurance companies. We analyze data from numerous auto insurance providers, evaluating them across a wide range of factors. This results in an overall rating for each provider, with top-scoring insurers leading the rankings.
Key factors in our ratings:
- Coverage (30% of total score): A wider variety of coverage options better meets diverse consumer needs.
- Cost and Discounts (25% of total score): We analyze rate estimates from Quadrant Information Services and available discount opportunities.
- Industry Standing (20% of total score): Market share, expert ratings, and years in business are considered.
- Customer Experience (15% of total score): Complaint data from the National Association of Insurance Commissioners (NAIC), J.D. Power customer satisfaction ratings, and our shopper analysis of customer service quality are assessed.
- Availability (10% of total score): Companies with broader state availability and fewer eligibility restrictions score higher.
Our Credentials:
- 800+ hours of research
- 130+ companies reviewed
- 8,500+ consumers surveyed
Data accurate as of the time of publication.
For feedback or inquiries regarding this article, please contact our team at [email protected].
