Gap Insurance Coverage

Many people have never heard of gap insurance coverage, some estimates put it as high as nine out of ten! So what is gap insurance coverage and would it be appropriate for you? Gap stands for ‘guaranteed asset protection’ and is commonly used to insure new cars. If you are buying a car with very little deposit, as many dealers are offering nowadays, you should definitely consider thie type of insurance. Being able to buy a new car without a deposit is great for those who can’t find the few thousand dollars that you might have to put down but it could leave you in a difficult position if anything happens to the car such as an accident or theft.

What Does Gap Insurance Cover?

If your car is stolen or totaled in an accident you will not get the whole value of the car back. As soon as you drive it away from the showroom the value decreases dramatically and the payout from your insurance company will be for the value of the car, not the amount left on the loan. For a car that is less than a year old this may be thousands of dollars lower than you bought it for and you still have to repay all of the balance left on the loan. This can leave you in a very difficult situation. If you couldn’t find the deposit for the car you aren’t very likely to be able to cover this shortfall from your own pocket.

This is where gap insurance coverage comes in! This type of coverage will pay the balance between the amount that your regular car insurance pays out and the remaining balance on your loan. If you lease a car gap insurance coverage is generally included in the lease, although people are very often not aware of it. Leasing companies, of course, must cover their assets and you have to pay the premium.

When is Gap Insurance Coverage Offered

Automobile dealers generally offer gap insurance when you purchase a new car. Don’t let them tell you that you have to buy it from the, This is not true! You are free too buy it from any insurance company. Gap insurance coverage is generally offered for 12 months on a new car and may also be available for refinanced or used vehicles.

Spend $399 on Gap Insurance today to save possibly thousands tomorrow.

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