Warranty, GAP, and Prepaid Maintenance Plans

You’ve picked the car, now what?

Capital One | 
Oct 13, 2021 | 2 min read

Capital One

Originally published on October 25, 2017

After all the research, dealership visits, and test drives, you’ve finally found the car you were searching for. Even after you’ve agreed on the price, you’re not exactly done yet. Just before you sign the final paperwork for your new car, the finance manager at the dealership will offer some extras that may be worth considering. Prepaid maintenance plans, extended warranties, and Guaranteed Asset Protection (GAP) plans all offer pros and cons. Some could be worthwhile, and some you can purchase later. It's wise to go into the conversation with the knowledge you need to make the best choices for your needs.

Maintenance plans


  • They’ll cover your basic service needs for a limited period.

  • You may be able to negotiate larger-cost maintenance services into your prepaid plan.

Con: They expire after a certain year period or mileage limit.

Extended warranties


  • They cover larger-cost maintenance services like brake replacement.

  • Generally, you can take your car to any dealer for service.

Con: They generally begin after the prepaid maintenance plan expires.



  • If your car is worth less than your loan, it is designed to cover the difference in the event of total loss.

  • It is not dependent on the fair market value of your car.

Con: If you missed any car payments, GAP won’t cover those.


You are not required to buy a maintenance plan or warranty, but some lenders may require GAP insurance in order to finance your car. These products aim to provide supplemental protection on your car purchase and potential cost savings on the scheduled maintenance of your ride.

Whether or not you need this added protection or potential savings on prepaid maintenance really comes down to your personal situation: what kind of car you buy, how long you plan to keep the car, and the specific products you’re interested in purchasing.

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Edited by humans.

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