Do I Need a GAP Insurance?


GAP or Guaranteed Asset Protection is a kind of insurance generally acquired by those people who just bought a new car.  In some cases, you will find this insurance pretty helpful, for instance, if your vehicle is stolen.  The insurance will typically cover the difference between the amount of money you initially paid for the car and the car's total value.  Before buying this insurance, you need to determine if this type of insurance is worth it.  Let us find out.


Is GAP Insurance Worth It?


Do I Need a Gap Insurance?

If you want to be protected from the possibility of having negative equity, then gap insurance is worth it. Understand that you currently owe a higher amount of money than the car's actual value.  When buying a new car, you have to realize that the initial payment that you made is just a tiny portion of the entire value.  Guaranteed Asset Protection is also applicable because your car's value is depreciating is at a tremendous pace. Moreover, you are paying for the monthly interest.  No matter what type of finance agreement you have with the dealer, you will have to pay a considerable lump sum in the end.  GAP covers the disparity between your upfront fee and the entire value of the car, saving you from the possibility of owing more money than you paid for.


Benefits of GAP

 Do I Need a Gap Insurance?

Guaranteed Asset Protection is also ideal for those people who are into a long-term lease arrangement.  It will save them in case that the car they are renting is written off or stolen.  Acquiring this optional insurance coverage will ensure that your insurance company will be willing to cover your on the money you owe to the contract-hire association. Because your newly bought car is depreciating in value at a massive scale, you are pretty concerned that you may not be able to replace it due to the high price tag that comes with it.  Guaranteed Asset Protection will not necessarily protect you from the depreciation of your car, but it can help if you want to replace it.


What are the Different Types of GAP Insurance?

 Do I Need a Gap Insurance?

There are different types of GAP insurance to choose from based on your preference that also comes with a distinct gap insurance quote.  The Finance GAP shoulders the amount of money you borrow to the finance company to buy your car. Return-to-invoice is a type of optional insurance coverage covering both new and old cars. The Vehicle-replacement Guaranteed Asset Protection will guarantee that you will receive the money that you will need to replace your vehicle.


Depending on your circumstances, A GAP insurance could be a wise buy or just a way to increase your expenses.  Be sure to ask your insurance company about the extent of coverage before buying the optional insurance coverage.  You have to understand that there are limitations on the coverage of the Guaranteed Asset Protection depending on the insurance agency, and you need to find that out before even buying it.

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