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What Is GAP Insurance
GAP Insurance, also known as Guaranteed Asset Protection, will cover the difference between the actual cash value of a vehicle and the balance still owed should you get in an accident and total your vehicle. Â
Some GAP policies also cover the deductible.Â
Some GAP policies also cover the deductible.Â
So, let's say you bought a car. The total amount financed was $25,000. A year after you purchased the vehicle, you are involved in an accident, and your car is totaled. Your auto insurance company only wants to pay you $18,000 for your car, yet you owe $20,000 on it. This is where gap will come in. It will pay the $2,000 dollar difference so you don't have to pay out of pocket.
Gap Insurance for a Lease
When you lease a vehicle, even though you aren't buying the car outright, you are still responsible for the cost of the car if it is totaled. Because monthly lease payments are significantly lower, there will be a huge difference between what you have put in and the value of the car. Therefore GAP insurance is much more critical for a lease. Actually, many lease contracts require it.
For buyers, GAP insurance still makes tons of sense. When you drive a car off the lot it can reduce in value by 30%. Â Plus, if you made a low down payment, have a high interest rate, or rolled over other cost from your previous vehicle into your new car payments, GAP will be a tremendous help should you get in an accident. Even if you feel that you are right-side-up in your vehicle, you can't predict what may happen to the value of your vehicle later on down the road. Â GAP insurance can give you peace of mind knowing that you are covered from out of pocket cost should an accident occur.
When you purchase a vehicle from Vaden Automotive Group, ask your finance manager about GAP insurance. If you decide to purchase it, we can roll the cost into your monthly payments so you don't have to pay the lump sum for GAP insurance.
When you purchase a vehicle from Vaden Automotive Group, ask your finance manager about GAP insurance. If you decide to purchase it, we can roll the cost into your monthly payments so you don't have to pay the lump sum for GAP insurance.
