Does Auto Repair Insurance Provide Sufficient Coverage?

• If you're looking for ways to further protect your car, check out this helpful guide first.
• Auto repair insurance or a similar option like an extended warranty may be a good fit.
• Extended Warranty Provider CARCHEX offers flexible and affordable coverage for your vehicle.

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As a car owner, you want to protect your vehicle from mechanical problems or breakdowns that come with age. Your regular car insurance policy will usually only cover repairs after an accident, not repairs due to normal part failures that occur over time. However, there are insurance programs designed specifically for non-accidental auto repairs called auto repair insurance.

Auto repair insurance, like an extended warranty, covers breakdowns and mechanical failures that result from normal driving habits. Different insurance and auto repair providers offer different levels of protection for your vehicle.

This guide will help you determine if buying auto repair insurance is the right choice to extend the life of your vehicle. We will also explain auto repair insurance alternatives such as extended warranties. CARCHEX, for example, offers advanced vehicle protection plans to cover almost any repair your vehicle may need.

You can get a free quote from CARCHEX by calling 866-254-0205 or by answering a few questions online.

What is Auto Repair Insurance?

Car repair insurance is a service offered to cover minor and major mechanical failures due to the normal wear and tear of your vehicle. Depending on your ISP, there may be several different levels of coverage.

Fast Facts: Auto Repair Insurance

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

How does Auto Repair Insurance work?

Auto repair insurance works similarly to an extended warranty with a few limitations. Coverage for certain parts of your vehicle will be determined by your provider and the plan you choose. When you encounter 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 request prior approval for repairs. Once your claim has been approved by the insurance company, you can go to an authorized mechanic for repairs.

Extended Auto Warranties Offer More Options

When it comes to long-term protection for your vehicle, an extended vehicle 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 car repairs due to regular use. This is different from the manufacturer's warranty, which usually only covers mechanical failures due to faulty factory parts or workmanship.

Fast 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 just about any vehicle, as they offer multiple layers of protection. They are especially good for older or larger vehicles.
• Average Cost: The cost varies depending on the age of your vehicle and the mileage. Third-party warranty companies usually offer a range of plans and pricing options, so you'll be able to set up an extended warranty to suit your budget.
• Deductible cost. Your deductible depends on your service contract, but in most cases it is between $50 and $100 with a $0 deductible.
• Pros: You can get a third-party extended warranty at any time in a variety of coverage options. This allows you to protect an older car or a car with higher miles. Since high mileage cars are more likely to need repairs than new ones, it makes sense to have an older car. Now you are much more likely than ever to have a car that goes over 100,000 miles and you want to protect it. You also won't be limited to using your dealership for repairs and can choose a plan that offers more protection than a dealer extended warranty.
• Cons: Unlike auto repair insurance, you won't use one company for all your protection needs. However, if your extended warranty provider is a reputable company with positive customer reviews and a high customer service rating, this shouldn't be a problem.

Comparison Auto Repair Insurance Coverage

Regardless of which type of policy you choose, it is important to understand what is covered by your plan. Before signing up, you should get a sample contract from your provider that will tell you exactly what is covered and what is not.

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

• brakes
• exhaust
• Steering
• Bridge
• Heating and cooling
• Engine parts such as water pump

Extended warranties typically provide either bumper-to-bumper coverage—complete coverage with a few exceptions listed—or transmission coverage that protects the transmission and associated components. The best extended warranty companies offer several plans for each type of coverage, as well as some in the middle. Variety ensures that you protect the vehicle systems you would like to protect and don't get stuck paying for unnecessary coverage.

CARCHEX Third Party Extended Warranty Provider

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

• Wide range of coverage options: CARCHEX has five levels of coverage with 16 contracts available from vendors. Some coverage options protect your vehicle for up to 10 years. These plans are backed by top rated insurance companies including Royal Administration Services and American Auto Shield. Should you choose to cancel your coverage, CARCHEX offers a 30-day money-back guarantee.
• Best Customer Service: With a ThoroughlyReviewed score of 10.0 and an A+BBB rating, you know you're getting service from a trusted company. CARCHEX promises a Low Price Guaranteed Daily Guarantee, which means they will start at the lowest price.
• Flexible Payment Options: Some extended warranties allow you to pay upfront, but CARCHEX offers monthly instalments. The range of plans means you can choose a contract that fits 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 will pay for repairs directly to the store, so you don't have to wait to get a refund.
• Extra Benefits: All CARCHEX protection plans include 24/7 roadside assistance, as well as towing, car rental, gas delivery, and trip interruption services.

Get full coverage with the CARCHEX Vehicle Protection Plan. Start by getting a quote when you call 866-254-0205 or fill out an online form.

Is car repair insurance worth it?

For some drivers with new vehicles, this type of insurance may be worth it. However, many of the new car repairs covered are already covered by the manufacturer's warranty. This would make your repair insurance an unnecessary expense. You can check your new car's reliability rating to determine if it will need repairs in its first few years of operation.

As a general rule, reliable cars that are new or have low miles are not good candidates for repair insurance. As these vehicles age, extended warranties likely offer better coverage and better protection. You can add an extended warranty after the manufacturer's warranty expires and continue to protect your car for years to come.

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

Other Alternatives to Auto Repair Insurance

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

Manufacturer's Warranty

A manufacturer's warranty is a warranty provided by your vehicle's manufacturer when you purchase a new vehicle. Manufacturer warranties typically last three to five years or 36,000 to 100,000 miles. They only cover breakdowns and repairs of faulty parts on your vehicle.

• Who offers it? Automakers provide warranties for new cars sold through dealerships.
• Best Use: Protect your shiny new car from unexpected damage due to faulty part or workmanship.
• Average Cost: Manufacturer's warranties are included when buying a new car.
• Deductible Cost: Some manufacturers have a franchise and some do not. These deductibles are usually between $50 and $100. Read your warranty for specific information about your vehicle.
• Pros: This is an included service with a new car purchase that will help you fix faulty parts.
• Cons: Manufacturer warranties are usually short-lived and only cover defective or faulty parts and labor, not mechanical problems due to normal wear and tear.

Dealer Extended Warranty

If you're buying a car from a dealer, the sales team will likely offer you the option to purchase an extended warranty. Extended warranties or vehicle service contracts are different from manufacturer warranties. They cover a variety of repairs to your vehicle, including those needed due to normal wear and tear. Often, extended warranties take effect after the manufacturer's warranty has expired.

• Who offers it? At the time of purchase, dealers provide an option for extended warranties. Extended warranties through dealerships may also be referred to as vehicle protection plans and labeled for your vehicle manufacturer, such as Ford Protect Extended Service Plans.
• Best Use: A dealership extended warranty can be a good choice for those who want to protect their new car after the manufacturer's warranty has expired. However, buying a protection plan directly from a dealer is not always the best choice for coverage.
• Average Cost: Dealers typically pay for the cost of extended warranties. Instead of listing the cost of a service contract, the dealer will show you your total monthly price and simply include the cost of the warranty in other fees and charges, such as financing charges. Ask for a detailed cost breakdown to get an accurate dealership extended warranty cost. Most grower protection plans cost between $1,000 and $1,500 per year.
• Deductible Cost: Deductible for Dealer Protection Plans is typically between $0 and $250. The zero dollar deductible is only available on the highest priced plans.
• Pros: You'll be able to purchase an extended warranty at the same time you buy a car, and can generally include service contract payments in your financial payments.
• Cons: Extended warranties from dealerships limit your repair options. Most require you to return to the dealership for any covered repairs. This can be a problem if you're moving after buying a car or can't make an appointment if you need to fix something. In addition, many extended dealer warranties offer less coverage than auto repair insurance.

Vehicle protection plans from third party 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 don't need to have the repair done at the dealer's service center. In addition, a third-party extended warranty can usually be purchased at any time. This means you can wait until your car is old and likely to need repairs before signing up for a service contract.