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GAP Car Insurance

4.jpg As you may have heard before, purchasing a car is a bad investment. That’s not to say that everyone doesn’t need a car, but if you want to keep your purchase worth what you paid, then you won’t be happy to see the value of your car plummet as soon as you drive it off the lot.

This is where GAP car insurance comes in. Guaranteed Auto Protection is often used by people to represent the gap in coverage between their car’s value and how much one owes on a car. This is demonstrated with an easy example. Say you purchase a car for $20,000 and you begin to pay off the purchase in monthly installments. If you get in an accident, your insurance company will pay for the value of what your car is currently worth. If, as mentioned above, your car deprecates in value as soon as it’s taken off the lot, the difference between how much you owe and how much your insurance provider will cover can leave you financially responsible for a large amount of money. Even a small loss of value, such as a 10% drop, represents $2000 dollars you will be responsible for. GAP car insurance protects owners from thee situations.

People who will benefit most from GAP car insurance are drivers who are leasing a vehicle, people who purchased a car without paying a large down-payment, or people who have a finance plan on their car for more than four years. All of these people are at risk for paying the “Gap” between their cars value and what their insurance provider will cover, so it is strongly recommended they look into purchasing guaranteed auto protection plan.

GAP car insurance is relatively low cost, so the benefits of a plan will quickly add up and offer valuable financial protection. Many car insurance companies will provide GAP insurance on their plans, so you may actually have the protection it provides without even knowing about it. If not, purchasing a plan is a simple add on. If your current insurer doesn’t offer GAP protection, the automobile dealership that you purchased your vehicle from will most likely be able to offer you a plan.

If you own an older vehicle, you may still be able to purchase GAP car insurance. Generally, this type of insurance is only available for cars that are fairly new or brand new and are financed. If you are leasing a vehicle, GAP insurance will most likely be built into the lease. It’s important to note that this will not always be the case and for your protection you should always ask and double check that you are covered.

GAP car insurance can protect you from being left on the hook for thousands of dollars in damages based on the difference of car value and the financing plan you paid for it. It’s highly recommended that before leasing or financing a vehicle, you discuss GAP insurance with your dealership or your own auto insurance company.

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