Auto Gap Insurance

Auto gap insurance is a policy that protects the financial losses caused by car accidents. It is usually offered by car dealerships and banks. The cost of gap insurance depends on how much the loan balance is and the value of the car. There are certain scenarios where gap insurance is not necessary, however. For instance, if the car owner paid most of the car’s price with savings, they do not need to purchase auto gap insurance. Rather, they will receive their assessed value less the deductible. auto insurance quotes online free

Auto gap insurance is available in many forms. It covers the difference between the market value of the car and the loan balance. Some insurers offer coverage of up to 25 percent of the market value of the car. It is important to understand the coverage options and how much coverage you need. Some plans are more comprehensive than others.

Auto gap insurance is necessary for many people who finance their cars. If something unfortunate happens to the car, GAP insurance will cover the difference between the loan balance and the car’s value. This insurance is often offered at a lower rate than the dealer’s financing. However, not all insurers offer these policies, and some offer them only for new vehicles. Another option is to get auto gap insurance through your auto loan lender. These policies may require a one-time fee.

If you purchase a high-end car, it is very likely that the value will depreciate rapidly, so if you don’t have gap insurance, you could end up paying off the loan. This can be a costly process, and if you don’t have the money to cover it, gap insurance can save you from tens of thousands of dollars.

Auto gap insurance is usually included in a vehicle purchase agreement or can be purchased separately from the insurer. When you purchase a new vehicle, it is important to read your contract carefully and ask about coverage. However, it’s important to remember that gap insurance doesn’t cover your car repairs. Besides, if you have collision or comprehensive coverage, gap insurance won’t help you repair it.

While gap insurance is not required by law, some lenders and dealerships may require you to purchase it. If you are not satisfied with the coverage, you can easily cancel the policy. In some cases, you may even receive a refund for unused premium. Generally, gap insurance isn’t much more than a few dollars a month.

Consumer advocates recommend comparing quotes from your own insurer and from a stand-alone GAP insurance vendor. The prices will usually be lower than you would get from the dealership. In addition, consumers should remember that most insurers will not waive the deductible.