GAP coverage is something most people get through the dealership but what people don’t realize is that they can get it for half the price through their auto insurance carrier!
GAP coverage covers the gap that might occur if you total your vehicle and the insurance pays out an amount that is less than the existing loan. For example, let’s say you buy a brand new Honda Pilot for $28,000. We know that vehicles depreciates in value fast, so if an accident happened a week after you bought the vehicle the insurance company would likely give you the depreciated amount of around $24,000. At this point there is a GAP between what the insurance company pays you and what you owe on it. Without GAP coverage, you would be responsible for the remainder balance of $4,000.
Most people get this explained to them at the dealership and get it right to have the coverage, the problem is they are overpaying! Instead of paying up to $800 over the 5 year loan, why not pay $5 a month on your insurance policy which is typically around what it is depending on the vehicle.
But this is not just good to have on a brand new vehicle, but any vehicle you have a loan on you should purchase this insurance. For $5 a month, it is well worth it if something happens.
If you would like to know more about this, or any other insurance need, please email me at firstname.lastname@example.org