GAP insurance, in short, is insurance that can help you pay off your auto loans if your vehicle is totaled or stolen, especially if you owe more than the vehicle’s depreciated value. Gap insurance covers the “gap” between how much the car is worth and how much you still owe. It’s meant to be used alongside collision coverage to provide assistance and relief if you end up without a useable vehicle.
Gap insurance is typically offered as an add-on when you get a brand-new car insurance policy. However, if you’re happy with your current insurance provider, it is possible to opt into gap insurance later on, too. Some insurance companies require any car with gap insurance to be brand new, but some only need you to be the original lease or loan holder and have a vehicle newer than two or three years. It is best to check with your provider before making a final decision.
Some factors to consider when you’re deciding whether or not to get gap insurance include how you plan to pay off your vehicle. If you qualified to pay less than 20 percent as a down payment and have an auto loan longer than 60 months, gap insurance is a positive investment for you and your vehicle. Additionally, if you’re leasing rather than buying it, gap insurance might be for you.
To learn more about the benefits of gap insurance or how to get it, pay us a visit at Village Motors of Conover.