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February 24, 2022
Many of the top extended 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?
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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.
The strict laws in California carefully regulate:
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.
Technically, only a manufacturer can provide a warranty for a car. However, you can get additional coverage after the manufacturer 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 that we’ll discuss below.
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.
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.
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:
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.
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 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.
Learn more about Olive.com in our full review.
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.
Learn more about CARCHEX in our full review.
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.
Learn more about autopom! in our full review.
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.
California has strict laws regarding extended warranties. However, there are still options. There are a few third-party extended warranty providers available in California offering “Mechanical Breakdown Insurance” including CARCHEX, autopom!, and Olive.com.
No, Carshield is not available in California.
No, Protect My Car does not offer Vehicle Service Contracts in California.
Yes, Olive.com Car Warranty offers Mechanical Breakdown Insurance in California.
Yes, CARCHEX is available in California. Be sure to check their website and submit information for a quote to find out more.
No, Endurance does not offer extended warranty plans to California residents.
Mechanical Breakdown Insurance is an insurance policy that California’s Department of Insurance regulates. Therefore, the DOI has scrutinized the policy and you can rest assured that it is standardized.
Yes, you can cancel a Vehicle Service Contract in California. If you cancel within 60 days (or 30 for a used car without a manufacturer’s warranty) then you will receive a full refund. To do so, you must send a cancellation notice based on the policies in the VSC. If you cancel after the 30/60 day window, then you receive a partial refund.
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