November 20, 2020

How To Decide If You Need To Buy Mechanical Breakdown Insurance Or Not

By Sona Mathews

The first thing that you learn about mechanical breakdown insurance is that it is not mandatory. However, this does not mean that it is not a very smart investment in many possible scenarios.

What is mandatory in the US is auto insurance. You simply need it or you are not allowed to drive on the public roads. With mechanical breakdown insurance, it is up to you to make the choice.

Obviously, there is no shortage of such policies available on the market. You can see an overview of what is available in California.

How To Decide If You Need To Buy Mechanical Breakdown Insurance Or Not: eAskme
How To Decide If You Need To Buy Mechanical Breakdown Insurance Or Not: eAskme

Other people are at: How to Wreck Your Junk Car with CashCarsBuyer

In order to make the best possible choice, you will need to be informed.

With this in mind, here are the most important things to know when you decide if you actually need mechanical breakdown insurance.

Understanding Mechanical Breakdown Insurance

The basics are very easy to understand. Mandatory car insurance will protect the property of the other drivers in the event that you cause an accident.

Mechanical breakdown coverage is meant to only protect your vehicle.

In the event that a car part breaks, even when this was not caused by a collision, the policy will help you to cover replacement and repair costs.

You are practically protected against the natural appearance of wear and tear, which is a reality for every single vehicle out there.

It needs to be added that this insurance coverage is often confused with extended car warranty, which basically covers much more.

Mechanical breakdown is a part of extended car warranty and aims to cover all mechanical breakdowns.

What Is The Value Of Your Vehicle?

Because of the fact that the policy is an optional one, it is a very good idea to first decide whether or not the car is actually worth the extra costs.

You are protecting an investment you made so if the car you own does not have a high enough value, it is important to reexamine options.

Some of the contributing factors that you have to consider when you make this decision are:

  • Make and model
  • Car age
  • Current mileage
  • Average commute distance
  • Recent major repairs you paid for
  • Failing systems

At the end of the day, the choice does boil down to one factor, which is determining how long the car is expected to keep operating.

When you drive an older vehicle and you put up with some occasional inconveniences as you actually save money to buy a new car, it does not really make any sense to spend more money on additional breakdown insurance.

In the event that the old car does operate very well and you expect to keep it for another year, or more, it is time to seriously take into account the possibility of buying mechanical breakdown insurance since this will prevent more costly future setbacks.

No matter how we look at things, new cars have the highest value. This value starts to go down as soon as you buy the car.

Because of this, it is really important that you make sure that your investment will be worthwhile. The car that you bought new will never sell for the same price or higher.

This is true even if you sell it right after you buy it from a dealer.

With mechanical breakdown insurance, you can drive your vehicle for a longer time.

Also, resale value is protected because you can easily take care even of the minor issues that naturally appear.

Simply put, when it makes sense to protect your car from a financial point of view because the value is still high, this is an insurance extra you have to seriously consider.

The Coverage Offered

If you decide that mechanical breakdown insurance is a smart investment in your case, it is time to start comparing the deals that are available on the market.

Just as with all insurance policies on the market, there can be huge differences between providers.

These are policies that will cover various services. What is covered is based on what package you choose and how much you pay for it.

There are basic, premium, and different other in-between that are nowadays available.

Also, if there is a higher possibility that you will end up using the warranty, you will have to pay more on your monthly rates. In addition, upfront costs can be higher.

For instance, when you opt for the basic extended mechanical breakdown insurance policy, it is possible that just transmission and engine problems are covered.

A newer vehicle will rarely suffer from a major setback like what this coverage gives access to.

The premium warranty is the one that basically covers everything related to car parts, from your brake pads to your air conditioning.

With the mid-level packages, a very high variation is possible.

We should also highlight that if you bought a new vehicle and you just selected basic extended warranty packages, there is a pretty good possibility you will need to add mechanical breakdown insurance.

This helps you secure some lower rates if you go for the same insurer, which is always an advantage.

When you buy a car that was used, there is a lower possibility you will be given the possibility to opt for this type of warranty.

You are paying for a much shorter lifespan for the car investment. Also, the perks associated with buying a new car disappear.

Out of all the perks, the extended warranty is definitely the one that is the most valuable.

Remember that second-hand cars always have higher chances of being faced by breakdowns.

You will end up paying more for the mechanical breakdown insurance coverage, but your vehicle will end up running for longer.

Used cars never have a factory warranty so you use the mechanical breakdown insurance as a way to protect your investment.

To put it as simply as possible, mechanical breakdown insurance is a very good idea when you can use it for a used car and something that is very beneficial for new vehicles.

What do you think? Do you have any questions or suggestions?

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