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What is the Best Auto Repair Insurance Plan to Purchase Based on Income?
If you are planning to buy a new or used vehicle, and are looking to purchase an auto repair insurance policy for that vehicle, you will want to be aware of the different types of policies available in the benefits and costs of each type. Also, you might want to consider your personal income when choosing an auto repair insurance option.
Extended Warranties
Extended warranties are the most popular form of auto repair insurance policies, and are usually sold to a customer at the time a vehicle is purchased. Depending on the type of extended warranty that is purchased, the policy may cover only basic repairs, bumper-to-bumper incidents or almost any type of repair that may be required. These types of policies are popular because the cost of the policy is generally rolled into the car loan and does not usually increase in monthly car payment by a very large amount. Though the entire cost of the policy is paid up front either by you or with the car loan. Therefore, if your monthly income is fixed or limited, this may be a good option for you.
Mechanical Breakdown Insurance
More standard auto insurance companies are now offering mechanical breakdown insurance policies. These policies work in a similar fashion to extended warranties in that they pay for many types of common repairs as they are needed. Most of these policies have some sort of deductible that must be met before the policy will pay for repairs. One advantage of these types of policies is that you can cancel the coverage at almost any time. However, these types of policies will generally result in monthly premium payments that may be higher than the monthly cost added to a car payment by an extended warranty purchase.
