The Basics - Warranties, Gap and More.

When it comes to buying your next car, we want it to be as stress-free as possible. We also want you to be happy with your purchase. After all, this is a vehicle you’ll be with for an undetermined amount of time so we know you’ll want to find the right fit! In this post, we want to break down some of the protections and coverage you can have for added peace of mind. There are different types of warranties that can come into play when you purchase a vehicle. It’s important to understand what’s available and what isn’t. Let's explore that now:

  • Factory Warranty 

The most common of car warranties. All car manufacturers offer a factory warranty on new vehicles. A factory warranty usually includes a new vehicle limited warranty, sometimes referred to as a bumper-to-bumper warranty. A factory warranty may also include a powertrain warranty, and may also cover items such as maintenance, corrosion and emissions coverage. With Factory Warranties, these are normally available when the car is first sold brand new and has a mileage limit or time limit before it expires. 

Depending on the make and model and miles, you could buy a used car with remaining coverage from the Factory Warranty. Always a great thing to check for! 

  • Extended Warranty / Service Contract 

An extended warranty, also known as a vehicle service contract, covers the cost of certain repairs after the standard factory warranty expires. These warranty types can vary from items such as a power train which covers engine and transmission issues up to complete coverage. These are purchased usually when you're buying the vehicle (after it's first sale from a big box dealership.) 

  • GAP 

Guaranteed Asset Protection (or “GAP”) is protection that works in tandem with your insurance. Normal car insurance covers the fair market value of the car, but not the total loan amount. If you owe more than the car is worth you’ll most likely be responsible for that.

Here’s an example: Bob took out a loan for $5,000 however after an accident; insurance only covered $4,200. So $800 is still leftover on the auto loan and Bob has to cover that out of pocket.

There's two types of GAP offered: the first type is an insurance policy sold by an insurance agent. The second type is a waiver agreement sold by a Finance / Insurance Manager or offered when buying your car.

TIP: While some of these items can be purchased after a vehicle has been sold, if you're looking to add a service contract (warranty) or GAP and want it to be part of the financed cost overall, you'll want to add it before completing the sale.Otherwise you could have to pay for this out of pocket. 


When buying a used vehicle, cars are normally sold “As Is.” That means that unexpected maintenance and repair expenses are your responsibility. Service Contracts are great for peace of mind and keeping your finances in check. At Cars of Kentucky, we have our entire inventory checked, serviced and road tested before each sale. However no one can predict what the future holds and it’s better to be over prepared then under prepared.

Did you know that when you purchase a vehicle from Cars of Kentucky, you can grab an included 90 Day Power Train warranty as long as the vehicle is less than 20 years old and the asking price is met. Make sure to speak to ask your sales specialist about a warranty and different options during your visit!

We hope this post helped provide some insight on warranties and GAP and how to protect your investment! 

Cars of Kentucky is a Richmond, KY based Auto Dealership specializing in used vehicles for over 34 years. Located on 356 Big Hill Avenue, Richmond, KY. Visit our current inventory online