GAP stands for Guaranteed Auto Protection and, in the event of an accident, it can cover the difference between your car’s insurance payout and what you still owe on your loan.
Most people don’t realize they need GAP insurance until they purchase their car — which is one reason why buying it through your dealership can be especially helpful (and smart).
But if you already have an old car that you no longer owe money on, you may want to check out this guide to see whether purchasing gap insurance on your current car makes sense.
In This Article
Do I need GAP Insurance?
If you purchased a vehicle that was leased, then it’s highly likely that GAP insurance is included in your lease. If not, then you should be able to purchase it when you buy your car or at any other point time before you sell it.
Since GAP stands for Guaranteed Auto Protection (and not Guaranteed Approval Provider), many auto dealerships include standard GAP coverage in their financing package. Either way, there are plenty of ways to determine whether or not you need GAP coverage and just how long that coverage will last.
how do I know if I have gap insurance?
There are several ways to determine if your vehicle is protected against loss through an insurance gap.
There are two ways to check whether you have a gap insurance: your existing car insurance statement and your loan or lease agreement.
Will my insurance company offer GAP Insurance?
GAP Insurance is a great option to consider when you’re financing a new car purchase. This additional coverage can pay for damages that exceed your vehicle’s depreciation value (the difference between what you owe on your auto loan and how much it was worth when you bought it).
When shopping for GAP coverage, ask questions like how long does GAP insurance last? and will my insurance company offer GAP Insurance? This will help you understand what type of policy will work best for your situation.
Can I buy GAP Insurance from a third party?
Most car insurance companies don’t offer GAP (Guaranteed Auto Protection) Insurance. If you’re interested in buying additional GAP coverage, a third-party source may be your best bet.
With a third-party provider, you may be able to obtain more complete and customizable coverage than what you can get through your car insurer. Additionally, it’s easy to compare GAP coverage from different providers by shopping online; if you find two or three policies that fit your needs, then it’s very easy to choose which policy is right for you.
How much does GAP Insurance cost?
This is a question that comes up all of the time. And it’s a difficult one to answer because there are so many variables involved. However, for most cars, GAP Insurance costs about $1/day; for most trucks and SUVs it’s around $2/day. The price can vary depending on your age and credit score.
How long does it take to get GAP Insurance coverage?
By using an online insurance agency, you can complete your coverage in a few short minutes. Most companies provide instant quotes that you can use to purchase GAP Insurance at any time. Once you’ve purchased your coverage, it will usually take about two weeks for it to go into effect.
During that time, no one will be able to file a claim against your policy—and you’ll start saving money on new vehicle purchases. You don’t need to worry about how long gap insurance last – just buy it and save!
What will my GAP policy cover me for?
With GAP insurance, you’ll be covered in a worst-case scenario. For example, if your car is totaled in an accident that’s not your fault and it’s worth less than your loan balance, you’ll get the difference between what worth and what you owe.
If your car is stolen or vandalized and it doesn’t come back after some period of time (usually 60 to 90 days), you’ll also get reimbursed for its value up to its replacement cost. That way, there won’t be any delay between getting a new vehicle and getting payments from your insurer; one will just follow right after another—no gap!
Is there anything else I should consider before buying a GAP policy?
How long does it last? How much will it cost? Is GAP available for all vehicles? These are all great questions that you should be asking before purchasing a GAP policy.