Before you agree to purchase gap insurance, make sure you ask a few questions. You may find out that gap coverage will not benefit you at all, or that the coverage it provides is not worth what you have to pay for it. Keep in mind that some dealerships may require you to carry gap insurance as a condition of financing your car, so gap insurance may not be a choice at all, at any price.
What is GAP insurance? – General Automobile Protection, called gap insurance, is designed to benefit the lien holder of a vehicle. If the car is stolen or totaled, gap insurance will pay the lending agency the difference between the book value and the amount remaining on the loan.
Does Gap insurance pay me? -Â No. The purpose of gap insurance is to cover the difference between the book value of the car and what you actually owe, including any interest charges. If you purchase gap insurance expecting to get a payout if you file a claim, you are mistaken.
Do I have to buy gap insurance? – Some finance companies and car dealerships require you to carry gap insurance. It is not a legal requirement for driving your vehicle according to state laws, but you may not be able to buy a car unless you agree to have it,
Gap insurance can be included in the quotes you get from an online insurance quote website. You will be asked for the amount of the loan and the make and model of the car, factors that affect how much your premiums will increase to include gap coverage. Remember, gap coverage serves no purpose for a car that is not financed, so donâ€™t fall into the trap of purchasing this type of coverage if you are paying cash for the car.