Did you know that people are keeping their cars for longer? The U.S. Energy Information Administration says that the average age of a truck is up by almost two and a half years. The average age of a van is up by two years, and the average age of cars and SUVs has gone up about one year. What does this mean?
As we have said in previous blogs, average Americans are driving older vehicles. They seem to prefer shouldering auto repair costs over financing a new car. Options like auto repair insurance and extended warranties offer vehicle owners savings on repair costs. However, you need to know what these options are and how they work first.
What Is Auto Repair Insurance?
Auto repair insurance, also known as mechanical breakdown insurance, isn’t like normal car insurance. Though required by law in almost every state, normal auto insurance only covers damages after a collision or accident.
If your car crashes into a telephone pole, car insurance will cover the damage as long as the crash meets the conditions of the policy. However, if your vehicle breaks down without crashing into something, normal car insurance most likely won’t cover the repairs.
Mechanical breakdown insurance covers repairs that are not caused by collisions. Though there are still rules for what it covers, there are certain advantages if you own an older vehicle.
What Is an Extended Third-Party Warranty?
When you buy a new car, it often comes with a dealership warranty. This warranty repairs/replaces auto parts that malfunction due to defects or manufacturing failures. They often last up to three years or up to a set number of miles driven by the car and are extendable.
Dealerships, manufacturers and other third-parties sell options that extend coverage for repairs. These extended warranty options and auto repair insurance are similar, but their differences may determine which is right for you.
Which Is Better?
What are the key differences between an extended warranty and mechanical breakdown insurance?
- Price: Car warranties are often more expensive than auto repair insurance. You usually pay for a warranty with one upfront payment. Since that cost is often rolled into auto loans, you may even have to pay interest on the cost of a warranty. You can pay for insurance against auto repairs through regular payments. These tend to be much smaller than warranty payments, and you can cancel the policy at any time.
- Time: Getting your vehicle repaired with a mechanical breakdown insurance policy can take longer than warrantied repairs. Insurance policies often require you to file a claim before getting your vehicle repaired. Owners don’t need to file a claim when it comes to warranties.
- Options: Warranties may require you to take your vehicle to certain shops or mechanics. Insurance is often more flexible, and occasionally requires a prior authorization. However, the age and make of your vehicle can limit the insurance coverage available, while a warranty is vehicle specific. Other considerations include whether the insurance or warranty is transferrable with the vehicle, whether the insurance comes with perks, and what the coverage limits are on either the insurance or warranty policy.
Our San Mateo County Auto Repair Shop Will Always Help
Whether you buy an extended warranty or an auto repair insurance policy depends on the circumstances. Owners of vehicle models that have bad reliability records may actually save money, but always do some research beforehand. Here at Kirberg Motors, we are all about sensible solutions to your automotive needs. Our San Mateo County car repair shop has been serving our community for over 50 years. We can handle your auto repair needs, whether you have mechanical breakdown insurance, a warranty issue or you are paying out of pocket. Give us a call at (650)336-5911 to schedule an appointment today!