From a recent Yahoo! Finance Article by Jay MacDonald, On Wednesday January 12, 2011, 6:00 am EST
Want to keep costly auto repairs from breaking your budget after your manufacturer's warranty expires? One option may be mechanical breakdown insurance, or MBI, a little-known insurance product that acts like an extended warranty on new and used vehicles but with several advantages, including payment terms, that may make it a good choice for some.
Unlike a manufacturer or dealer warranty, MBI is an insurance contract between the car owner and the insurance company, overseen by state regulators and backed by state insurance guarantee funds. Think of it as auto repair insurance. Policies are available through licensed property and casualty insurance agents, credit unions, finance companies and online.
MBI isn't new, but it has gained traction during the recession as drivers keep their vehicles longer between purchases.
"We're getting more and more requests for it," says Michael Randles, president of Insurance Center Associates of San Pedro, Calif., which sells several MBI products. "I think people want to insulate themselves against future problems. They aren't getting a new car every two or three years now, and because of that, they want to get a five- or six-year, 100,000-mile policy."
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