Published on January 7th, 2019 | by Sunit Nandi0
Vehicle GAP Insurance Compared to Car Warranties Explained
When it comes to motoring, there are all kinds of different types of cover to consider which can be confusing particularly for new motorists to the roads. It is important that you aware of the main types of cover because having the right level of protection in place could save you a fortune if you were to encounter any problems. With this in mind, here is a closer look at two types of cover which people often find consuming – GAP insurance and warranties.
GAP insurance is an optional policy which covers the shortfall between an insurance payout and the amount originally paid (or the amount outstanding on a finance agreement) if the vehicle were to be written off. Many motorists are unaware, but if you were to write your vehicle off then you would only receive the current market value for the car. Due to depreciation, this could leave you out of pocket by thousands of pounds and without an automobile. Accidents occur far too often and often these will not be your fault so it is better to be safe than sorry.
A car warranty, meanwhile, offers financial protection if you break down due to a mechanical or electrical fault. When new, the car will be protected by a manufacturer warranty where the cost of parts and labour will be covered by the manufacturer – this normally lasts for three years or 60,000 miles (although they can be longer). Once this warranty has expired, you can either run the risk of driving without a warranty or take out an extended car warranty.
An extended car warranty is a smart purchase to make because it provides protection as the car gets older. Faults can occur at any moment in an automobile’s lifetime and these can be extremely expensive and difficult to cover yourself. Additionally, an extended warranty can often have a range of helpful add-ons, such as covering the costs of a hire car or onwards travel. This all provides peace of mind which is highly valuable especially if you are driving an older car where repairs can be costly.
The main difference between GAP insurance and a car warranty is that a GAP insurance policy provides financial protection if you were to write the vehicle off while a warranty provides financial protection if you were to break down. Both forms of cover can be highly valuable for motorists and help you to save thousands of pounds. It is important to be aware of the difference between the two types of cover particularly when you consider that a vehicle may already be covered by a warranty or it may not, so you should always find this out when purchasing a used car.