Everything You Need to Know About Gap Insurance at CarMax

What Is Gap Insurance?

Gap insurance stands for “Guaranteed Auto Protection”, and it is an insurance policy designed to protect car owners in the event their car is deemed a total loss. Gap insurance will cover the difference between the actual cash value of the car and the remaining balance on the loan or lease. This is especially important if you have a newer car, as cars tend to depreciate in value the moment they are driven off the lot.

Gap insurance is a great option for those who have taken out a loan or lease on a car that is still being paid off. If the car is totaled in an accident or stolen, gap insurance will cover the difference between what the car is worth and what is still owed on the loan or lease. This means that the car owner is not left with a huge financial burden.

Why Is Gap Insurance Needed?

Gap insurance is needed because cars depreciate in value quickly. This means that the actual cash value of the car will be much less than what is owed on the loan or lease. If the car is totaled in an accident or stolen, the car owner will still be responsible for the remaining loan or lease balance. Gap insurance covers this difference, so the car owner is not left with a financial burden.

Gap insurance is especially important if the car owner has an older car, or one with a higher loan or lease balance. Gap insurance can also be beneficial for those who are leasing a car, as they will still be responsible for the remaining payments on the lease in the event the car is totaled or stolen.

How Much Is Gap Insurance at CarMax?

The cost of gap insurance at CarMax varies depending on the specific car, loan or lease amount, and other factors. Generally, gap insurance will cost between 1-5 percent of the loan or lease balance. This means that for a loan or lease balance of $10,000, gap insurance could range from $100-$500.

Gap insurance rates can also vary depending on the age and make of the car, as well as the deductible amount chosen. It is important to shop around and compare rates from different providers to get the best deal.

It is also important to note that gap insurance is not required by law, but it is a good idea to purchase it if you are taking out a loan or lease on a car.

What Does Gap Insurance Cover?

Gap insurance covers the difference between the actual cash value of the car and the remaining loan or lease balance. This means that if the car is totaled in an accident or stolen, the car owner will not be responsible for the remaining balance.

Gap insurance can also cover other expenses, such as the cost of a rental car while the car is being repaired or replaced. It can also cover the cost of towing and storage fees in some cases. Gap insurance usually does not cover the cost of repairs or any other damages.

When Should You Buy Gap Insurance?

The best time to purchase gap insurance is when you are taking out a loan or lease on a car. This way, you can ensure that you are covered in the event the car is totaled or stolen before the loan or lease is paid off.

It is also important to shop around and compare rates from different providers to get the best deal. In some cases, it may be cheaper to purchase gap insurance through a third-party provider than through the dealership or bank.

Gap insurance is an important insurance policy for those who are taking out a loan or lease on a car. It can provide peace of mind and protect car owners from financial burden if the car is totaled or stolen.

Conclusion

Gap insurance is an important type of insurance for those who are taking out a loan or lease on a car. It can provide peace of mind and protect car owners from a financial burden in the event the car is totaled or stolen. The cost of gap insurance varies depending on the specific car, loan or lease amount, and other factors, but generally, it will range from 1-5 percent of the loan or lease balance. It is important to shop around and compare rates from different providers to get the best deal.