Is Gap Insurance Worth It On A Used Car
Is Gap Insurance Worth It On A Used Car?
Gap insurance is an optional form of car insurance coverage that can help protect drivers from financial loss if their vehicle is totaled in an accident or stolen. It's particularly beneficial for owners of used cars, which can depreciate quickly and may not be worth as much as the driver owes on the loan. Gap insurance can help bridge this gap between what the driver owes and what their car is worth, so they don't have to personally cover the difference.
What Is Gap Insurance?
Gap insurance, also known as guaranteed auto protection (or GAP) insurance, is an optional, add-on insurance coverage that can help pay the difference between the actual cash value of a vehicle and the balance of a loan or lease. This coverage can help protect drivers from owing money if their vehicle is totaled, stolen or otherwise damaged beyond repair.
Who Should Consider Buying Gap Insurance?
Gap insurance is most beneficial for drivers of vehicles that are worth significantly less than what is owed. This is especially true for used cars, which depreciate in value much more quickly than new cars. If you bought a used car for $15,000 and owe $17,000 on the loan, gap insurance could help pay the difference if your car is totaled or stolen before you can pay off the loan.
What Does Gap Insurance Cover?
Gap insurance typically covers the difference between what you owe on your car loan or lease and the actual cash value of your car. This coverage can also help cover any taxes, fees and other costs associated with the purchase of the car. Gap insurance may also cover the difference between the amount of your insurance settlement and what you owe, if the amount of your settlement is less than what you owe due to depreciation.
Is Gap Insurance Worth It On A Used Car?
Gap insurance can be a valuable investment for drivers of used cars. Because used cars tend to depreciate quickly, it's important to make sure you have enough coverage to protect yourself financially. If you owe more on your car than it's worth, gap insurance can help prevent you from having to pay out-of-pocket for the difference.
Where Can I Buy Gap Insurance?
Gap insurance can be purchased from most auto insurance providers. If you currently have auto insurance, check with your provider to see if they offer gap insurance. If they don't, you can compare quotes from other insurers to find the best coverage for you. Most insurers offer gap insurance for a one-time fee, which may range from $175 to $500, depending on the provider and the amount of coverage you need.
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