GAP
Guaranteed Asset Protection
Who Should Consider GAP Insurance?
- New Car Buyers: A new car depreciates quickly, often losing value faster than the loan is paid off.
- Leased Vehicles: Leasing often results in a higher “gap” between the car’s market value and the remaining lease balance.
- High Loan-to-Value Ratio: If you financed a large portion of the car’s value, you may owe more than it’s worth.
- Cars with Low Down Payments: Low or no down payment increases the likelihood of owing more than the vehicle’s value.
GAP insurance can be a lifesaver if you’re facing the financial burden of a totaled or stolen car. It’s particularly helpful for those with loans or leases where the car’s value depreciates quickly. Make sure to evaluate your options and consult with your insurer or dealership to decide if GAP insurance is the right choice for you.
Frequently Asked Questions (FAQs)
Do I need GAP insurance if I have full coverage?
Full coverage only pays for the current market value, not necessarily the amount left on your loan. GAP insurance fills the gap.
Can I cancel GAP insurance?
Yes, you can cancel GAP insurance at any time, and you may be eligible for a refund for any unused portion of the coverage.
How long should I keep GAP insurance?
You should keep it until your loan balance is less than the car's value, or until the loan is paid off.