Owning and running a car comes with several ongoing costs: car insurance, road tax, MOT, services, maintenance, fuel and more. An expensive repair is the last thing you need, especially since the cost of vehicle parts and labour are constantly increasing. If the worst happens you’ll want protection in place to avoid a sticky situation.
GAP insurance is an underrated option to help cover financial shortfalls after a total loss. Meanwhile, extended warranty covers the costs of unexpected vehicle repairs. Both GAP insurance and warranty are invaluable but they don’t compare. Discover the difference between these two types of insurance, which one is best and when is the best time to purchase an insurance policy.
Car warranty and GAP insurance are both types of protection for when the unexpected happens; however, their coverage doesn’t overlap. GAP (Guaranteed Asset Protection) insurance covers the financial shortfall after a total loss, whereas, warranty covers the cost of repairs if the vehicle has a sudden or unforeseen malfunction.
Most people can’t afford a like-for-like replacement with their insurance payout so GAP insurance is worth it for topping up your settlement after a total loss. Depending on the type of GAP insurance you choose, it can help cover vehicle depreciation, car finance, your contract hire deposit, outstanding lease payments and other financial shortfalls after a write-off. Policies lasting up to five years are available but these can’t be renewed or extended.
On the other hand, an extended warranty pays the repair cost for unforeseen mechanical or electrical faults. Your car insurance won’t cover mechanical failures, and after your factory warranty runs out – typically after three to five years – you’re vulnerable to an expensive repair. There are different levels of extended warranty, so you can choose the component cover that suits your vehicle and budget. Policies last up to three years but you can renew it if your car still meets the requirements.
Both GAP insurance and extended warranty protect against unforeseen costs. You can save a significant amount on repair costs by choosing a comprehensive warranty, meanwhile, you ensure you can afford to get back on the road after a devastating write-off with GAP coverage.
While both car warranty and GAP insurance are beneficial, they’re hardly comparable. If you need to choose one type of coverage, used car warranty would be a smart option. Your car is more likely to break down than be written off, so car warranty coverage may be more likely to come in handy. Moreover, it covers up to the market value of your car (Gold and Platinum) for the whole policy term so, you can make more than one warranty claim on the same service contract, if necessary. Due to the nature of GAP insurance, you’ll need a new policy after making a successful claim.
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Platinum warranty by ALA Insurance is the best value package and provides the most comprehensive component cover. Additional perks come with the premium plan, such as wear & tear cover (up to 8 years or 80,000 miles), diagnostics cover, and infotainment protection. All customers benefit from roadside assistance (a £50 contribution towards vehicle recovery), and coverage of onward travel, emergency accommodation and replacement car hire costs if you break down away from home.
Drive with confidence knowing you’re protected against an unexpected repair, while avoiding significant costs after a total loss. Protect your vehicle with GAP insurance and extended car warranty.
No, GAP insurance does not cover vehicle repairs, it’s designed to pay out if your car is written off (damaged beyond repair) or stolen. If your auto insurance pays your total loss claim, your GAP insurance pays too and with a 99% payout rate – you get the cover you pay for. On the other hand, comprehensive car insurance and vehicle warranty, pay for repair costs. Compare extended warranty and other car insurance products.
The most popular GAP insurance policies are available to buy in advance of, and up to 180 days after collecting your new car (Back to Invoice GAP). New cars mostly benefit from GAP insurance to cover the sharp drop in value over the initial 3-year period of ownership. However, pre-registered cars and used cars still lose value over time. GAP insurance is worth it for used and new cars to cover the financial shortfall after a total loss.
Many people buy their cars using a finance agreement, GAP insurance is useful for covering outstanding finance if this is still higher than your car’s initial value at the time of the write-off. Still, if you have a contract hire agreement or you bought your car outright, you may still want to consider GAP cover.
Can’t afford a total loss? Consider GAP Insurance
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You’re most at risk of significant financial shortfalls if any of the following applies to you:
You have a fast-depreciating car model
You have a new, or nearly new car
You use a contract hire agreement
You paid for your vehicle using finance or a personal loan
Extended warranties are useful when your initial warranty expires. For cars, this is usually after three to five years. You can buy extended warranty from the manufacturer who provided your original warranty, or you can choose a third-party warranty company. Independent warranty companies can offer fairer prices and better warranty cover but these can vary greatly, so you’ll need to do your research.
For the best protection, plan ahead, and ensure your extended warranty policy starts as your original coverage ends.
ALA offers three excellent-value warranty policies with unbeatable component cover, you’ll benefit from the following:
No pre-inspection
Day one cover
Zero excess
No ongoing age and mileage limits*
Up to market value policy limit (for Gold & Platinum)
Diagnostics cover (Gold & Platinum)
Wear and tear cover (Platinum)
EV Warranty available
Van coverage available
* Wear and tear covered under Platinum policies until the car reaches 8 years or 80,000 miles
Customers trust us to have their backs when they really need it, which is why we’re rated 4.9 stars on Trustpilot with over 15,000 five-star reviews.
Don’t risk an expensive repair – choose a used car warranty
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