Glossary
Mechanical breakdown insurance (MBI)
An insurance product covering certain mechanical and electrical failures in your car, commonly sold with dealer finance and often financed into the loan.
By Leverage Finance · Updated 17 July 2026
MBI works like an extended warranty: it covers repair costs for listed mechanical and electrical failures, subject to exclusions, claim limits and servicing conditions. Policies vary widely in what they cover and what they pay out, so the policy document matters far more than the sales description.
MBI is one of the most commonly financed add-ons in NZ car loans. If it's inside your loan, you're paying interest on the premium for the life of the loan. A refinance is a natural point to weigh it: read the policy, check the exclusions against your car's age and mileage, and decide whether to keep the cover, as a deliberate choice rather than a line item you never noticed.
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