Mechanical breakdown cover for used cars gains ground in Brazil

Buyers torn between a brand-new car and a better-equipped used model that has left its factory warranty behind have an alternative safety net: mechanical breakdown cover, which pays for repairs when key components fail, up to a pre-agreed indemnity cap. Typical policies span the engine, gearbox, electronic ignition, fuel injection, electrical systems and brakes.

One of the most active players is broker Wiz Conseg, which sells these products inside roughly 140 dealerships across Brazil. Its mechanical warranty — covering everything from the engine to air-conditioning and the multimedia unit — averages R$ 1,900 a year and generally accepts cars up to ten years old or 180,000 km. A 24-hour assistance package with towing runs about R$ 500 annually and carries no age limit. Executive director Alexandre Kalache recalls a basic R$ 900-a-year policy that ended up absorbing a R$ 15,000 engine rebuild on a mid-range car worth R$ 70,000-80,000.

The segment is expanding quickly: Wiz Conseg's convenience-insurance business grew 35% in 2026, and the broker projects growth of up to 45% by year's end compared with 2025. Insurer Mapfre offers rival coverage for used and semi-new vehicles of up to ten years, serving upper categories as well as entry-level models; eligibility hinges on factors such as model year, mileage and intended use. Plans range from basic engine-and-gearbox protection to packages adding climate control, brakes, steering, electronics and roadside assistance.

Mapfre's director of mass-line insurance and consortia, Andrea Soares, sees ample room for the category to grow, noting that Brazil's car insurance market remains concentrated on theft and damage protection while mechanical coverage is still little known to most consumers.