What Is Gap Auto Insurance
What Is Gap Auto Insurance?
Gap auto insurance, also known as Guaranteed Auto Protection or GAP insurance, is a type of insurance coverage for new and used cars that helps protect a driver if their car is totaled or stolen. It is designed to cover the difference between what a driver owes on their car loan and the actual cash value of the car, should it be totaled or stolen.
What Does Gap Auto Insurance Cover?
Gap auto insurance covers the difference between what a driver owes on their car loan and the actual cash value of the car. This is known as the “gap” between the loan amount and the car’s market value. If a driver’s car is totaled or stolen, GAP insurance can help cover the difference, providing peace of mind for drivers who may otherwise struggle to pay off their car loan.
When Is Gap Auto Insurance Necessary?
Gap auto insurance is most commonly necessary when the driver is financing a new or used car, and the loan amount is greater than the car’s actual cash value. This is especially true if the car is a few years old and its value has depreciated rapidly. In this case, GAP insurance can help cover the difference and prevent the driver from having to pay off the loan in full.
How Much Does Gap Auto Insurance Cost?
The cost of GAP auto insurance varies greatly depending on the make and model of the car, the age of the car, and the length of the loan. Generally speaking, GAP insurance for a new car is more expensive than for a used car, and longer loans will also result in higher costs. The best way to determine the cost is to contact an auto insurance provider.
What Are the Benefits of Gap Auto Insurance?
GAP auto insurance can provide drivers with peace of mind in the event of an accident or theft. If their car is totaled or stolen, GAP insurance can help cover the difference between the loan amount and the car’s actual cash value, meaning they don’t have to worry about paying off the loan in full. Additionally, GAP insurance can help protect drivers’ credit scores in the event of an accident or theft, as they won’t be responsible for the remaining loan balance.
Where Can I Get Gap Auto Insurance?
Many auto insurance providers offer GAP auto insurance coverage. It’s important to shop around to find the best deal for your particular situation. You should also speak with your lender to determine if they offer GAP insurance, as this may be the most cost-effective option. Additionally, some dealerships may offer GAP insurance, so be sure to ask about this when you’re shopping for a car.
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