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What is GAP auto insurance?
GAP insurance is related to the loan versus the value. It stands for Guaranteed Asset Protection. New cars and trucks depreciate (go down in value) from the minute that you drive off of the car lot. If you put little or no money down, then it’s possible that you’ll owe more on your loan than what your car is worth. If you have an accident within the first year or so of your loan and total your car, the insurance company may not even settle with you for enough to pay off your loan. GAP insurance steps in at this point and covers the difference, keeping you from owing money to the lender.
Do I Need GAP Insurance?
GAP auto insurance comes in many different varieties and finding the one that meets your needs is essential to getting the most for your money. GAP insurance is one type of automobile insurance that not much is known about, but if you purchase a new car, it may be a type of insurance that you need to check into and consider. This special type of car insurance insures that your car will be paid off in the event of an accident, especially if the accident occurs during the first part of the loan, when you may owe more than the car is worth. Most free online GAP auto insurance comparison websites offer quotes from GAP auto insurance companies, in addition to liability insurance, but it’s important to do your research to see if you really need it.
Should I buy GAP insurance when leasing a car or buying a car?
If you’re leasing your car, you’re paying down the principal on your loan even slower than when you’re buying. This can leave you upside down on your loan if you total the car. GAP insurance is normally a requirement when you’re leasing a car, but if you’re not asked and plan on leasing, you want to be sure that you check into this type of insurance to protect yourself financially.
Can I get GAP insurance when trading in a car?
If you’re trading in a car that you still owe on, this adds to the total amount of the loan on your new car. This can cause you to be upside down in your loan and owing more than the new car is worth. A totaled car after an accident can mean that you could owe hundreds or thousands of dollars to the lender if you don’t have GAP insurance. If you want your GAP insurance refund check after an accident, consider comparing GAP insurance quotes online from top GAP insurance providers.
What if I have GAP insurance but I have no auto insurance?
It’s great that you have protection on your investment through your lender, but if you have GAP insurance only and no car insurance, then there’s no auto insurance company to pay you the value of your car. If there’s no “gap” to fill, your lender will not be forgiving. Most lenders require liability, comprehensive, and collision coverage on any financed car, and the law in most states require it as well. Be prepared and get a free GAP insurance quotes online comparison today.
GAP insurance can mean the difference between financial ruin and damage, especially if you’re purchasing a new car. If you buy a car with a low or no down payment, lease a car, or trade a car that’s not completely paid off, you’ll want to be sure that you check into GAP insurance. This can protect you if you total your car and are upside down in your loan and can keep you from owing your lender hundreds, if not thousands, of dollars. Consider it today. Use our GAP insurance price comparison tool to get cheap GAP auto insurance quotes.