Standard insurance covers you up to the current market value of your newly purchased car if it is totaled. New cars, on the other hand, depreciate the most in the first few years, leaving a difference between the market value and the price you paid.
The depreciated value is covered by GAP insurance. What does GAP insurance cover in terms of accidents, environmental damage, and more? Learn how GAP insurance differs from collision, liability, and comprehensive auto insurance in the sections below. To learn more about vehicle coverage for Freehold-area drivers, contact the Honda Universe finance team.
What is the Purpose of GAP Insurance?
GAP insurance, like extended warranties, adds to your existing coverage. What does GAP insurance cover in terms of damages? GAP insurance kicks in to cover the gap between the current value of your Honda and the amount you owe on it. The following types of losses are covered:
- Fire
- Theft
- Vandalism
- Other Natural Disasters: Storm Damage
Is GAP Insurance a Must-Have?
Depreciation rates slow dramatically after you’ve had your car for a few years. If you recently bought a car, GAP insurance is a good idea because the gap between the automobile’s market worth and what you paid for it can be thousands of dollars. You won’t have to complete paying off a totaled car if you buy GAP insurance today.
When Should You Purchase GAP Insurance?
GAP insurance isn’t always the best option for Toms River car owners. What exactly is GAP insurance, and who will profit the most from it? If any of the following apply to you, consider adding GAP insurance to your basic coverage:
- You put down less than 20% as a down payment.
- Your loan period is at least 60 months.
- Your car is predicted to degrade more quickly than the norm.
- You owe money on an old auto loan and have negative equity.
WHAT IS GAP INSURANCE AND WHAT DOES IT COVER?
So now you’re up to speed on the fundamentals. Even so, if you’ve never looked into your options in-depth before, you’re likely to have a lot of concerns regarding the kind of protection these plans provide. We’ve provided a more in-depth response to the topic, “What does GAP insurance cover?” here.
GAP insurance will cover the difference between your outstanding loan debt and your vehicle’s genuine value if you’re dealing with any of the following:
- Theft \sFire \sVandalism \sAccident
- Natural disasters (tornado, hurricane, flood, etc.)
- Engine failure, mechanical faults, owner death, and circumstances where extended warranty coverage conflicts are not covered by GAP insurance. Visit Suntrup Automotive Group for more insurance information, such as comprehensive insurance coverage and more.
GAP insurance will cover the difference between your outstanding loan debt and your vehicle’s genuine value if you’re dealing with any of the following:
- Theft
- Fire
- Vandalism
- Accident
- Natural disasters (tornado, hurricane, flood, etc.)
Engine failure, mechanical faults, owner death, and circumstances where extended warranty coverage conflicts are not covered by GAP insurance. Visit Suntrup Automotive Group for more insurance information, such as comprehensive insurance coverage and more.
IS GAP INSURANCE REQUIRED?
The primary goal of GAP insurance is to ensure that you can pay off the remaining loan debt if your new vehicle is totaled. As a result, the insurance package is beneficial to any driver who does not want to end up “underwater” when financing a car, truck, or SUV in Jefferson County or Oakville.
Although GAP coverage is not required by law, we believe it is a wise choice for drivers of all types. Remember that the moment you drive your vehicle off the lot, its value begins to decrease.
This implies that unless you have GAP insurance, a car crash within the first few years of ownership could leave you with huge obligations and a new loan! Visit Suntrup Automotive Group for more car-buying advice, such as whether auto insurance covers the vehicle or the driver.
Jim Marsh Kia offers a variety of insurance and financing options. You’re ready to purchase like a pro now that you know the answer to the question, “What does gap insurance do?” When budgeting for your new car, whether you’re ready to buy or just browsing, it’s a good idea to factor in the costs of insurance, maintenance, and vehicle upkeep.
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