Mechanical Breakdown Insurance
Most major repairs occur after the manufacturer warranty expires. If you are like most consumers, you're keeping your cars longer and repair costs keep rising. In-order to avoid out-of-pocket costs for these repairs some sort of extended coverage is a necessity!
The big question is how long you anticipate owning your car. If the car you've just bought is new, take a close look at its factory warranty before making a decision on more coverage. If you plan on keeping the car long, or if you put a lot of miles on your car commuting after the factory warranty expires, Mechanical Breakdown Insurance (MBI) may be a good investment.
What is the difference - Extended Warranty and Mechanical Breakdown Insurance?
A warranty is the first layer of mechanical breakdown coverage on any new vehicle. The coverage is provided, at no cost to the buyer by the Manufacturer. A warranty has a specific term expressed in months or miles. and usually protects the entire vehicle against defect in workmanship and material. This is known as "bumper to bumper" protection.
An extended warranty – also known as a service contract can cost you in the thousands and most consumers collect very little of that. It extends the mechanical breakdown protection beyond the basic warranty term, and applies to specific assemblies contained within the vehicle. A good example is the powertrain warranty. In this case, only the powertrain (engine, drive axle, transmission) is protected for an additional length of time or miles such as 6 years or 60,000 miles. These cost extra and are sold separately.
Mechanical Breakdown Insurance is a true insurance product. Like personal auto or homeowners insurance the MBI creates a direct relationship between the vehicle owner and the insurance company. MBI coverages and premiums are regulated by state insurance departments.
Another warranty is known as a vehicle service contract and is a written agreement between the vehicle buyer and the dealership. This contract is often mistakenly called an extended warranty. The dealer becomes responsible for providing mechanical breakdown coverage or reimbursement to the vehicle owner. Most service contracts are restrictive and conditional. The dealer is allowed to set the actual price of the contract at whatever level he chooses.
Mechanical Breakdown Insurance Through DCU
If you will be keeping your car for a while Mechanical Breakdown Insurance is a good deal. Sold through the credit union they are fairly priced for new and used car coverage. This cost is about half what a dealer would charge you for a typical extended warranty. And Mechanical Breakdown Insurance, usually lets you go to your repair shop, where dealer warranties limit work to specific dealerships.
DCU is making MBI available to our members, here are some of the features:
- You can buy coverage on both new and used vehicles.
- Competitive pricing compared to plans offered by many auto dealers.
- All MBI plans also include 24-hour emergency roadside service and rental car allowance.
- 3 plans to choose from - Easy Street, Main Street, and First Street.
- Nationwide protection.
- Complete line of coverage designed to keep your vehicle on the road.
- No deductible on covered parts and labor.
- 60 day "Free Look" - cancel for any reason within the first 60 days and get a full refund.
Easy Street, Main Street, or First Street Coverage*
Easy Street – Factory Type Coverage (best coverage available)
- Components Covered – Because so many components are covered, it is not possible to list everything. Instead, this shows a small number of parts that are not covered: oil, brake shoes, belts, hoses, tires, tune-up items, filters, a/c coolants, exhaust and emission parts, sound reproduction, cosmetic and body
parts, glass and paint.
Main Street – Deluxe Coverage (all items included in the First Street plan plus the following)
- Air Conditioning
Compressor, evaporator, accumulator and condenser, if factory installed.
- Steering
Power steering pump, steering gear housing and its internal parts and rack and pinion assembly.
- Brakes
Master cylinder, ABS master cylinder, vacuum booster, wheel cylinders, disc brake calipers, hydraulic lines, and fittings.
- Cooling
Radiator, fan clutch, water pump, cooling fan motor.
- Engine
Timing chain, belt tensioner and guides, intake manifold, head gaskets, valve lash adjusters, pickup screen and tube, valve guides, valves spring locks and retainers,
harmonic balancer.
- Fuel Delivery
Fuel pump, fuel tank, fuel injectors, metal fuel lines, fuel sending unit.
- Front Suspension^
Upper/lower control arms, upper/lower ball joints, steering knuckle, wheel bearings, control arm shaft, and bushings. ^Vehicles under 85,000 miles at contract purchase.
- Electrical
Battery, voltage regulator, alternator, wiper motors and module, window motors, cooling fan motor, electric fuel pump, ignition module and coils, engine
operation computer, distributor, starter, starter solenoid, seat motors, door lock actuators, manually operated switches for above-listed parts.
- Automatic Transmission
Chain, drum assembly, solenoids, bushings, accumulator, clutches, bands, servos, parking pawl, speedometer gear, transmission cooler, pistons.
First Street – Drivetrain Coverage
- Engine
Crankshaft and bearings, oil pump, pistons, rings, connecting rods and bearings, timing gears, chain/belt, camshaft, bearings, push rods, rocker arms/shaft, hydraulic
lifters, intake and exhaust valves, and springs. Engine blocks covered if mechanical failure was caused by above-listed parts.
- Standard Transmission
Internal transmission parts consisting of gears, input and output shafts, bearings, overdrive housing. Transmission case if malfunction was caused by the above listed parts.
- Automatic Transmission
Internal transmission parts consisting of gears, input and output shafts, bearings, front pump, planetary assembly, sprags, governor assembly, valve body, torque
convertor, transmission case.
- Drive Axle Assembly
2-Wheel Drive:
Drive shaft, ring/pinion gears, pinion bearings, side carrier bearings, carrier assembly, thrust washers, axle, axle bearings, universal joints, CV joints (except if boot was damaged or missing), drive axle housing.
- 4-wheel / All-Wheel Drive:
Drive shaft, differential and CV joints, transfer case parts listed on contract (except if boot was damaged or missing).
- Cooling
Water Pump - Limited to 50% parts and labor.
- Electrical
Alternator, Starter and Voltage Regulator - Limited to 50% parts and labor.
*This information provides a basic overview of each plan.
How To Get Mechanical Breakdown Insurance
Please consult with one of our loan representatives to discuss the Mechanical Breakdown Insurance program in more detail. Or, call us at 508.263.6700 or 800.328.8797.
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Digital Federal Credit Union220 Donald Lynch Boulevard PO Box 9130 Marlborough, MA 01752-9130 508.263.6700 • 800.328.8797
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© 2011. Digital Federal Credit Union
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