insurance

Do you need an extra car repair policy?

Randles says cost is another reason to purchase MBI from an insurance agent instead of a dealer. "We both get paid a commission, but it's a point of profit for them. If this policy is $1,000, they might charge you $2,000 or $3,000 for it," he says.

On the other hand, some insurers such as Mercury will give you the less-expensive, new-car rate if you purchase MBI 30 days before your warranty expires.

Jack Gillis, director of public affairs at the Consumer Federation of America and author of "The Car Book," calls MBI a statistical sucker's bet.

"Most consumers won't ever need to use it," he says. "Many, many warranties today last five years, which is longer than most people keep their cars. A lot of these extended service contracts are duplicative of what is covered by your warranty, and they happen to be one of the most profitable after-market items that dealers sell."

His advice? "Put that same money in a savings account and in the event that you have a catastrophic repair that isn't covered by your warranty, then you've got it to draw on. Statistically speaking, you'll really be building up your down payment for your next car."

But Randles, for one, is glad he had a Mercury MBI policy on his 2005 Ford Explorer when its transmission hit the skids 18 months ago. Cost to Mercury: $5,600. Cost to Randles: a $50 deductible plus transmission fluid.

"It was huge," he says. "I was counting my lucky stars that I had the coverage."

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