What is Guaranteed Auto Protection Insurance?
Guaranteed Auto Protection, known as GAP insurance, is basically coverage that helps protect you when you purchase or lease a new vehicle. When a new car is bought, it immediately starts to decrease in value. Since your insurance policy covers the depreciated value of your vehicle, GAP insurance will cover for the difference. Check the following blog to find out more and visit our website if you want to compare auto insurance quotes online free.
Gap insurance is an optional, add-on insurance coverage. It’s mostly associated with new cars, but you can buy GAP insurance alongside a second hand car under seven years old. After 7 years, a car is deemed old and insurance companies will not cover the gap.
The main reason for getting GAP is car’s depreciation over time. If you drive 10,000 miles a year in your new car, it could lose more than 60% of its value after three years. The genuine rate of depreciation depends on make, model and usage.
You should buy GAP insurance if any of the following applies to you and your car:
- You are purchasing or leasing a new or slightly used vehicle.
- You are buying an expensive car.
- You are financing a new or used vehicle without a large down payment, creating a “gap” between your vehicle’s actual value and your loan amount.
- You do not have enough money to cover the difference between the amount you owe on your loan and the actual cash value if your car is stolen or totaled.
The last point is really important. If you still finance a car, especially an expensive one, buying GAP is a smart choice.
You should also know that there are several typical exclusions: GAP does not cover aftermarket equipment installed and generally does not cover cars without C&C coverage.
Visit us for more info and free car insurance costs. Read more!