Does repair insurance really do what they say?

Is Auto Repair Maintenance Insurance Worth the Cost?

by Dollar Stretcher Contributors


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Is Auto Repair Maintenance Insurance Worth the Cost?

I recently found out that my retired mother is paying for auto repair maintenance insurance for her almost ten-year-old Cadillac, and it is costing her close to a few hundred dollars per month. The car is starting to have more and more mechanical issues, most of which have been covered by her insurance, but some not. The problem is that she lives pretty much Social Security check to Social Security check and does not have any extra cash to save for another car, but she would if she dropped this additional insurance coverage. Her thought is that she does not have to worry about a car payment, but for what she is paying for this insurance, she might as well have a small car payment. I'd appreciate advice from anyone who has paid for and used this type of insurance. Is it worth the cost to keep an older vehicle with this coverage or is it more cost effective to get into a newer car that does not require as many repairs, even if it means having a car payment for the next few years? I just would like to help my mom make the best decision for her finances.
Bill

Save the Money

I would drop the insurance and put the money into savings instead. That way, she can afford repairs as needed or save up for another vehicle. Unless the engine or transmission goes out, other repairs should be manageable, as long as the car is well-maintained and not rusting out.
Sheryl

Are you paying too much for auto insurance?
Make sure you're getting the lowest rate.

Love This Insurance!

Yes, I did my research and the manufacturer's warranty and others were so very expensive. Then my son told me about Warranty Direct, an online company. My deductible was $200. Over the past four years, they have paid far more than $6,000 on my behalf for my car's repairs. Warranty Direct's cost was minimal compared to my unexpected repairs and they let me make low monthly payments.
KB in Rancho Mirage

Replace with a More Reliable Car

It would make more sense to buy a two- or three-year-old low-mileage, fuel-efficient car. Not only would the car be more reliable, but also it would likely be safer as newer cars have more airbags, back-up cameras, side collision warning systems, and other safety features.

It also sounds like your mother would have money left over if the car payment is lower than the insurance cost. She could save the difference for maintenance for the newer car.

She may want to sell the Cadillac herself to get more money from the sale than she is likely to get on a trade-in.

I just replaced a well-running 16-year-old car with a new car for the reasons above. It's safer, more fuel-efficient, and more comfortable to drive.
Barbara

Want to pay off your car faster? Consider refinancing into a lower auto rate.

Don't Waste Your Money

It is the worst waste of money there is.
Georgia

Reviewed May 2017


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