What is Gap Insurance and How Much Does it Cost at CarMax?

When shopping for a car, many people overlook the importance of gap insurance. Gap insurance, short for Guaranteed Asset Protection, is a type of insurance that pays for the difference between the actual cash value (ACV) of your car and the balance still owed on the loan or lease if your car is totaled or stolen. This coverage can be extremely valuable, especially if you have recently purchased a new vehicle and still owe more than its value.

Gap insurance is available from many auto insurance companies and is often included in the cost of a new car loan. However, if you are purchasing a used car, or if you did not purchase gap insurance when you bought your car, you may need to purchase gap insurance separately. One option is to purchase gap insurance from CarMax, a popular used car dealership.

How Much Does Gap Insurance Cost at CarMax?

The cost of gap insurance at CarMax depends on several factors, such as the make and model of the car, the age of the car, and the amount of the loan. Generally, gap insurance at CarMax will cost anywhere from $200 to $500 for the duration of the loan. It is important to note that CarMax does not offer gap insurance for leases, only for loans.

What Does Gap Insurance Cover?

Gap insurance can be incredibly valuable if your car is totaled or stolen, as it covers the difference between the actual cash value of your car and the amount still owed on the loan. This can be especially beneficial if you have recently purchased a new car and still owe more than the actual cash value of the car. Gap insurance can also cover other expenses, such as sales tax, registration fees, and finance charges, up to the amount of your loan.

When Should You Buy Gap Insurance?

The best time to purchase gap insurance is when you first purchase the car. This is because gap insurance will cover the difference between the actual cash value of the car and the amount owed on the loan, regardless of how much the car depreciates. However, if you did not purchase gap insurance when you first bought the car, you can purchase gap insurance at any time from CarMax.

Bottom Line

Gap insurance is an important form of insurance that can provide coverage for the difference between the actual cash value of your car and the amount still owed on the loan if your car is totaled or stolen. Gap insurance at CarMax typically costs between $200 and $500 for the duration of the loan and can be purchased at any time, even after your car has been purchased.