Getting car insurance is mandatory by law. It is very helpful in times of inevitable fender-benders. However, if for instance your car gets totaled, car insurance would only cover how much your car is currently worth, regardless of how much you bought it for, and certainly not how much you still owe for your car. And this is how GAP insurance is going to help you.
GAP stands for Guaranteed Auto Protection. This is basically helpful if you owe more than how much your car is currently worth. Its main purpose is to fully pay what you still owe in your car loan in case your car gets totaled. Some companies will only let you purchase GAP car insurance for your used car up to 24 months after purchase. No GAP insurance is usually available for cars older than 8 years old.
It is recommended if your car’s worth depreciates rapidly, if you made a low down payment, if you have a high interest rate, or make minimal monthly payments. Because this means that if in case your car gets totaled, GAP insurance will pay for the entire amount that owe for your car while traditional car insurance will only pay you for much your car is currently worth which would be lesser. A car’s worth depreciates rapidly as soon as you step on that wheel and get it off the road. If your new car gets totaled, no matter how new it is, it will always worth lesser than how much you paid for it.
Even if you bought or traded-in for a used car, you’d still need to get GAP insurance especially if you paid more than what it was worth. During trade-ins, your old car’s worth is significantly much lesser compared to how much you’d earn if you sold it. If you do the math, you’re still paying more since you gave up your old car for a very cheap price. GAP insurance is also a guaranteed help if you take advantage of the “Buy Here, Get Here” dealership. This kind of dealership demands no down payment, no good credit standing but has a higher interest rate. This means that you’d still be paying more for the car compared to what it’s worth.
It is also a must when you lease a vehicle unless you have an auto insurance policy that will cover the entire finance amount in case of a car accident. Once you lease a car, you are responsible for the cost of the car if it gets stolen or totaled even if it’s not yours. Most lease contracts require GAP insurance and you have to abide to all the terms stated in the contract. Terms will vary from each company and you have to discuss with them for their specific terms so you could enjoy the benefits of gap insurance.
.You don’t need GAP insurance if you made a full payment, healthy down payment, or if you’ve been paying more than what you monthly payments should be. Do the math if you want to be sure if you need GAP insurance on top of your car insurance. Check how much your car is worth now and compare with how much you still owe for your car. If you think, GAP insurance would be of great help then it’s time to shop for reasonable rates in your neighborhood or online because GAP insurance is not usually included in traditional car insurance.
GAP stands for Guaranteed Auto Protection. This is basically helpful if you owe more than how much your car is currently worth. Its main purpose is to fully pay what you still owe in your car loan in case your car gets totaled. Some companies will only let you purchase GAP car insurance for your used car up to 24 months after purchase. No GAP insurance is usually available for cars older than 8 years old.
It is recommended if your car’s worth depreciates rapidly, if you made a low down payment, if you have a high interest rate, or make minimal monthly payments. Because this means that if in case your car gets totaled, GAP insurance will pay for the entire amount that owe for your car while traditional car insurance will only pay you for much your car is currently worth which would be lesser. A car’s worth depreciates rapidly as soon as you step on that wheel and get it off the road. If your new car gets totaled, no matter how new it is, it will always worth lesser than how much you paid for it.
Even if you bought or traded-in for a used car, you’d still need to get GAP insurance especially if you paid more than what it was worth. During trade-ins, your old car’s worth is significantly much lesser compared to how much you’d earn if you sold it. If you do the math, you’re still paying more since you gave up your old car for a very cheap price. GAP insurance is also a guaranteed help if you take advantage of the “Buy Here, Get Here” dealership. This kind of dealership demands no down payment, no good credit standing but has a higher interest rate. This means that you’d still be paying more for the car compared to what it’s worth.
It is also a must when you lease a vehicle unless you have an auto insurance policy that will cover the entire finance amount in case of a car accident. Once you lease a car, you are responsible for the cost of the car if it gets stolen or totaled even if it’s not yours. Most lease contracts require GAP insurance and you have to abide to all the terms stated in the contract. Terms will vary from each company and you have to discuss with them for their specific terms so you could enjoy the benefits of gap insurance.
.You don’t need GAP insurance if you made a full payment, healthy down payment, or if you’ve been paying more than what you monthly payments should be. Do the math if you want to be sure if you need GAP insurance on top of your car insurance. Check how much your car is worth now and compare with how much you still owe for your car. If you think, GAP insurance would be of great help then it’s time to shop for reasonable rates in your neighborhood or online because GAP insurance is not usually included in traditional car insurance.
No comments:
Post a Comment