It may be a rasp from the transmission, a rattle from the engine, or a growl from the water pump, or some other menacing noise – an indication of a problem that can't be wished away or drowned out with your radio.
For all the improvements in their reliability, cars still break down occasionally – even fairly new ones. You could be hit with a $3,000 bill for a new engine, $2,700 for a new transmission, or $1,000 to $2,000 for a new differential – no small matter if your vehicle is out of warranty.
But consumers have an option -- mechanical breakdown insurance -- provided they planned ahead.
The equivalent of catastrophic health insurance, it is designed to take the sting out of a massive repair bill. While it doesn't typically cover maintenance or "wear and tear" repairs, it does reimburse you for the truly massive repairs that can send your personal finances for a loop.
Worth The Risk?
It may not be for everybody: When it comes to buying insurance, consumers are clearly divided between the risk-inclined and the risk-averse, and mechanical breakdown insurance, or MBI, is clearly for the latter.
It works roughly like any other insurance. In most cases, you pay a premium and the insurance company picks up the tab for mechanical repairs, and sometimes even car rentals, towing and hotel stays if a trip was interrupted.
The coverage is relatively inexpensive, sometimes as low as $70 a year if you start your coverage when the car is new. Buyers don't need to come up with an upfront payment as they do with some extended warranty programs. You can pay monthly, quarterly or on some other schedule. Some credit unions roll MBI payments into their car loans.
In general, companies insure "relatively new or leased vehicles under 15,000 miles," said Brianna Baiocco, owner of columbusinsurancemarket.com. "Some companies offer programs with more mileage, but the amount is going to depend on the terms and conditions of that company. Every firm is different."
Deductibles in the $200 to $400 range are common, and "it could be more, depending on the coverage purchased," she said. Some are as little as $50 or $100.
Geico, one of the major players, insures the mechanical equipment on cars that are less than 15 months old and have less than 15,000 miles on them. Coverage can extend seven years or 100,000 miles, which ever comes first. At some other firms, cars with more than 100,000 miles on their odometers at the outset are eligible.
Pricing depends on the details of the policy. To lower the payment, car owners often can have the insurer scale back the contract's duration or raise the deductible. Some companies permit policy-holders to insure just key features such as engines and transmissions as a way to lower the cost.
Different From Traditional Manufacturer Warranties
Even though they compete with warranties, these policies are fundamentally different from them. Extended warranties typically aren't insurance products, and insurance bureaus don't regulate them as they do MBI products. That oversight is a source of comfort to many MBI policy-holders.
As with any insurance policy, consumer advocates say car owners still need to examine their contracts carefully and make sure they are getting the coverage they need – and are paying for. For example, if they have been told they are getting at least some "wear-and- tear" coverage, they should make sure it's in the contract.
They should also verify that the deductible is "per visit" to the repair shop. That is the standard that well-regarded companies have adopted. A deductible per repair should set off alarm bells.
Car owners also have to decide whether they really need the insurance in the first place. The driver may also want to consider a model's reputation for reliability – the insurance may never be needed. With vehicle durability on the rise, many cars make it 100,000 miles or more without serious problems.
And while your car is under warranty, the manufacturer is expected to pick up the tab before the insurer does. So it may not seem as though you are getting your money's worth from your MBI policy. Bumper-to- bumper warranties are often three-years or 36,000 miles, and powertrain warranties for five years or 60,000 miles are common.
But the insurance offers advantages even when a warranty is in force, said Ejaz Hasan, product manager at CUNA Mutual Group, a financial services provider to credit unions.
For one thing, the rates for ongoing coverage will be lower if the policy is purchased when the car is new. "If I know I am keeping the car for five years, then I may need additional coverage." For another, the policy adds value to the car since it is transferable to a new owner, he said.
Jack Gillis, director of public affairs at the Consumer Federation of America, isn't sure the extra coverage is worth it. Instead, consumers should consider putting away an amount equivalent to the premiums every month and then shoulder the expense of a big repair themselves.
But he acknowledges that some people are reassured by a little extra protection. "It is a matter of your own capacity for risk-taking," he said. "If you feel the need to purchase one of these policies, you should definitely shop around, however."
Another issue is that MBI policies usually cover the actual breakdown of a part – not wear and tear. This can be a source of misunderstanding between the owner and the insurer.
While a broken drive axle would qualify as a mechanical breakdown,brake pads and piston rings would fall into the wear-and-tear category in most cases: "A piston ring wears down – it doesn't just break," said Jeff Ostroff, publisher of carbuyingtips.com.
If a part wears out at the end of its normal lifespan, the MBI insurer isn't likely to pay for the repair. In many cases, an extended warrant plan would.
Despite the problems that may crop up, Ostroff remains a staunch advocate of extra insurance protection.
He gets around the entire "wear and tear" question by buying an extended service agreement that explicitly covers these repairs. And he makes sure that "wear and tear" is clearly stated in the contract.
His approach dates back to a problem-ridden Pontiac Trans Am that he owned years ago.
He had an extended service coverage on the vehicle, and "it paid for itself. I knew guys who had Saabs and Subarus, too, and their contracts paid for themselves."