What’s the Deal with Extended Car Warranties in California?
An extended car warranty can give you peace of mind and help cover the different types of repairs. However, when shopping for this coverage as a California resident, you may have a few issues.
Many of the top extended car warranty providers will exclude California from their coverage area.
The truth is that California has unique and strict regulations about vehicle service contracts in their state. These regulations are intended to protect consumers, but they can make it harder to find the coverage you need.
What exactly is California’s deal with extended warranties?
Can You Buy an Extended Warranty in California?
Compared to other states, California has some of the strictest laws regarding extended warranties.
Despite having strict laws, it is possible to purchase an extended warranty in California. However, you’ll find that it’s called “Mechanical Breakdown Insurance” instead.
California Warranty Laws
The strict laws in California carefully regulate:
- Who sells warranties
- What extended warranty contracts can contain
- What extended warranties are called
So, What Are My Options?
Simply put, it can be challenging to find an extended car warranty in California because of the strict regulations.
California residents have limited options for coverage, but some third-party providers offer MBI plans. The other option is to purchase this additional coverage through your insurance company.
What Is an Extended Auto Warranty?
Technically, only a manufacturer can provide a warranty for a car. However, you can get additional coverage after the manufacturer’s warranty expires with one of their extended warranty plans.
VSCs are commonly referred to as extended warranties, but they are two separate things. The main difference between a warranty and a VSC is who the provider is.
Some extended warranty providers will also offer California-approved warranties, which we’ll discuss below.
What Is a Vehicle Service Contract (VSC)?
A vehicle service contract is an extended warranty purchased from the dealer or a third-party provider. As mentioned above, VSCs and extended warranties are generally interchangeable terms, but when people refer to extended warranties, they are most likely talking about a VSC.
A VSC is not a warranty but a contract between you and the provider for what repairs are covered. Each policy offers unique coverage, either as named exclusion (only lists what is not covered) or named component (lists everything covered). Be sure you understand what the policy will and will not cover before purchasing.
Check out our best picks for third-party warranty providers here >>
What Is Mechanical Breakdown Insurance (MBI)?
Mechanical Breakdown Insurance is very similar to an extended warranty or VSC. It still covers repairs for unexpected breakdowns that the manufacturer’s warranty may not cover. Typical policies are around $100 per year.
However, the service is an insurance policy. MBIs do not replace your standard car insurance but serve as an add-on. The state Department of Insurance regulates MBI, which ensures adjusted, standardized rates.
Is Endurance Warranty Available in California?
Endurance Warranty, a prominent provider of extended auto warranties, is unfortunately not available in California. This restriction is due to the stringent regulatory environment in California that impacts many auto warranty companies.
Consumers should be aware that they will need to consider other warranty providers if they are California residents. The lack of availability of Endurance’s services in California is significant considering the state’s large population of vehicle owners.
Despite Endurance’s comprehensive coverage options and customer-friendly services, Californians need to explore other providers to protect their automotive investments. It’s advisable to check the latest state-specific availability as situations can evolve.
What’s the Difference Between an MBI and VSC?
Essentially, Mechanical Breakdown Insurance and a Vehicle Service Contract are your two options for extended warranties in California.
Here’s a breakdown of the key differences:
- Provider: VSC is provided by anyone besides the manufacturer and may be sold by the dealership or licensed provider. MBI is a contract with an insurance company and can be sold by a licensed insurance company or certain third-party providers.
- Availability: Calfornia residents will need to shop for an MBI, while the rest of the country will need to shop for a VSC when looking for extra protection for their vehicle.
- Regulation: A VSC is not governed by the DOI, whereas MBI is.
- Cost: Varies by policy, but MBI is generally regulated to ensure fair value for your money and adjusted/ standardized rates, whereas VSC does not have pricing restrictions.
- Coverage: You will need to assess the specific coverage of each plan. Both generally cover the same items.
Where Can I Buy Mechanical Breakdown Insurance in California?
There are several places where you can buy MBI in California. You can purchase it directly from some insurance providers, like AI Insurance. Additionally, some extended warranty providers offer MBI for California drivers.
Below we’ll explore the top extended warranties in California.
Best Mechanical Breakdown Insurance (MBI) in California
Looking for an MBI in California? In addition to extended warranties provided by manufacturers (Cadillac, Ford, Toyota, Honda, Hyundai, etc.), you should also consider MBI. Here are some of the top options for coverage in California:
Olive.com Car Warranty
Olive.com is a newer extended car warranty provider that is based in California. They offer Mechanical Breakdown Insurance in the state. They allow you to obtain coverage right away without a waiting period.
Olive.com Pros
– Highly rated on the BBB
– Easy to search for and find a plan
– Allows you to bring your vehicle to an ASE-certified mechanic
– Affordability and transparency
Olive.com Cons
– Must have a vehicle 10 years old or newer.
– Does not offer coverage for ride-sharing/commercial vehicles.
– The maximum coverage term is 3 years at a time.
Learn more about Olive.com in our full review.
CARCHEX
CARCHEX offers extended warranties in every state, including California. It’s a reputable company with a high customer rating on multiple platforms. It’s one of the most well-known and well-used extended warranty companies.
CARCHEX Pros
– Roadside assistance included with plans
– Can view sample contracts on their website
– A+ BBB rating / strong customer reputation
– 20 years of experience
CARCHEX Cons
– Additional cost for hybrids
– Limited coverage for luxury vehicles
Learn more about CARCHEX in our full review.
autopom!
autopom! (automotive peace of mind) has over 10 years of experience offering extended warranties. The company is a warranty broker, offering coverage from multiple companies. They offer extensive consumer education for car buying, selling, and more.
autopom! Pros
– Customer service, speed/responsiveness
– Collaborates with customers to resolve any administrative conflicts.
– Very high BBB rating (4.35 out of 5 stars)
autopom! Cons
– Pricier option
– You must contact them for a quote
Learn more about autopom! in our full review.
More MBI Providers in California
- Toco: As a California-based company, Toco does offer coverage in California.
How to Cancel California Warranty
You can cancel a car extended warranty at any time in California. Generally, if you cancel within 60 days of receiving the contract (30 days for a used car), then you receive a full refund. If you cancel after that time frame, then you will only receive a partial/prorated refund.
Keep in mind that if you filed a claim before canceling, the provider can keep some of the purchase prices as specified in the contract.
