What Is GAP Coverage and How Does It Protect My Vehicle?
What is GAP coverage, you ask? Guaranteed Asset Protection (GAP) can help bridge the gap between what you owe on your vehicle and its worth at the time of an accident or theft.
If your vehicle is declared a total loss due to an accident or theft, most auto insurance policies will cover it for up to the fair market value. But, what if you owe more than that to your lender or your lease financing company? That is when GAP coverage would be a huge benefit.
For example, let's say you bought a new car for $20,000. You made a $2,000 down payment, so you financed $18,000. A couple of months later, you get into an accident. Thank goodness, no one was hurt—but your car is totaled. Now, your car is valued by your insurance company at only $15,000. In those two months, you've made two car payments of $450 each—and you haven't made much of a dent in your principal. Now, you owe a lot of money on a car that doesn't exist anymore. That's where GAP coverage would kick in, helping you to avoid paying out of pocket for a car that's been destroyed.
Please contact us for more information regarding GAP. We offer a competitive GAP coverage for our customers that are interested in this insurance.