Just about everyone who buys a motor vehicle from a dealership has experienced it. It is the hard sell of car amenities soon after the car-buying process. You are ushered to the room where a dealership employee, maybe the finance manager, provides the seek you to sign, financing a new vehicle. Then there is the checklist of auto add-ons. You could add extended warranty, additional servicing packages and GAP insurance or Guaranteed Asset Protection.
What is GAP insurance? It\’s a proven way you protect your pocketbook, should something happen to your car before you finish repaying it.
I will never forget my beloved Honda Accord. The Accord and that i lived together in harmony for about two years, joyously traveling the open road. Then, I walked out onto the parking lot after Sunday church service, and couldn\’t discover it. It was gone, without a trace, disappeared into nothing. So I did what the majority of people do in this situation. I panicked. My insurance broker was very sympathetic-initially. I was then told I might be receiving a check for $13,000 to cover my loss. The only problem was I still owed about $15,000 within the car. I would still have to continue paying of the monthly car payment to pay that $2,000 difference, although I didn\’t have a car. Generally if i had GAP insurance, it would have picked up the tab around my situation.
When you drive your car off the lot, in most cases the car\’s value has now depreciated below the amount you financed it for–meaning you\’re \”upside down\” against your car. You owe more on the automobile than it\’s worth. Thus if your car is totaled, either by mistake or because it was stolen, your family insurance will only cover the book value. If there is a remaining balance beyond that, GAP insurance will cover that \”gap\” so that you don\’t have to. Let\’s face it, it\’s no fun to need GAP without have it.
Wondering if you can afford GAP insurance policy? If you\’re financing your vehicle, most businesses will roll GAP coverage into your monthly payment. Spread out over the life of your loan, it probably amounts to just a few additional dollars each month. Even though you get pre-approved with online auto lenders like RoadLoans, they enable you to add GAP insurance provided the charge fits into the amount you were approved for.
Still wondering what is GAP insurance? Should you have it, keep it. When financed, it\’s actually not terribly expensive. If you don\’t, you ought to investigate whether your vehicle is qualified to receive coverage. While it\’s not absolutely essential, GAP insurance certainly is nice to possess in your toolbox if something unravels.