Mechanical breakdown insurance is an actual insurance policy issued by insurance companies to cover the cost of specified repairs as well as the cost of replacement of certain parts. Warranty comes along with brand new car and mechanical breakdown insurance is an extended warranty for the car with additional benefits such as towing, roadside and medical assistance and rental facilities. Recent MBI products even offer coverage of cost of repairs due to wear and tear. 

1. In general Mechanical Breakdown insurance is available for new and used cars. However, it may be used only for the used cars that are less than a specific age. Warranty is being used for this purpose in the case of all brand new cars. 

2. Mechanical breakdown insurance policies require you pay a deductible. However, these deductibles are fairly inexpensive. The deductible amounts for mechanical breakdown insurance policies usually range from $100 to $200 per year. The more the coverage, your MBI will be more expensive. However, the warranty given by the manufacturer does not cost anything to the customer. 

3. Mechanical Breakdown insurance coverage will only pay for the mechanical break down to the limit as mentioned in the policy whereas a new car warranty usually includes the mechanical breakdown but also the bodywork and everything else within the warranty limit. The norms are defined in the term ‘bumper to bumper protection’, which is used to describe the warranty limitation. In general the new car warranty will be effective for 36 months or for the first 1, 00,000 kilometers. 

4. MBI is renewable and there is no extended coverage once the policy is due for renewal. However the car manufacturer in these days, usually offer the extended warranty on new cars that will be a limited extended warranty that covers only the engine, drive axle and transmission. 

5. Mechanical breakdown Insurance will include some or all of the following: engine, electrical system, gearbox, differential, drive shafts, steering, fuel system, air-conditioner, electronic ignition and braking and cooling systems. In addition MBI also provides roadside assistance, medical assistance, towing expenses, part of the cost of accommodation and a rental car. The important point to note is that the new car warranty usually includes them all but not the roadside assistance within the warranty period. 

6. MBI gets you the most important factor which is peace of mind, when you drive the car on road whereas warranty doesn’t get you peace of mind.  

7. MBI has got most reach as it applies to both new and old cars. In general it is always the old cars, where you need your extra safety measures and coverage. Since warranty is inbuilt in the brand new cars.