What is GAP Insurance? Answering Your Questions & More
GAP stands for Guaranteed Asset Protection, and is an optional form of car insurance covering the “gap” between what a vehicle is worth and what the driver owes on their lease in the unfortunate event that the car is either totaled or stolen.
So, should you get GAP insurance? Well, it depends on the current financial situation of your vehicle. Continue reading to make an informed decision about your future with GAP insurance.
When Is GAP a Good Fit?
GAP insurance may not be for everyone but if your financial situation surrounding your vehicle looks like any of the below it may be something you want to consider.
- You lease your car.
- You took out a car loan of five years or longer.
- Other Products are rolled into your auto financing.
- Your car has high mileage.
- You’ve financed most of your car and made a small down payment of less than 20%.
When Is GAP NOT a Good Fit?
Everyone’s financial situation is unique, and maybe for you GAP Insurance would be an unnecessary expense in your daily life. Take a look at the situations below to help you decide when GAP insurance would not enhance your life.
- The amount of money you owe on your car is less than its value.
- You are already financially sound enough to pay the difference between the amount owed and the car’s value.
When Will You Not Receive a Payment from GAP?
Most insurance companies won’t pay for a claim if your vehicle is damaged but repairable, in other words your vehicle must be totaled in order to receive a payment. There is also no transferring your insurance or trying to use it toward another vehicle — it is for the vehicle registered in your name only. If you find yourself needing payment toward these types of issues, look toward your car insurance policy to cover them.
Greater GAP Insurance Begins Here
Many times GAP Insurance is offered through car dealerships, though this is not financially recommended as it is likely more expensive than going through your bank or credit union. A Guaranteed Asset Protection Insurance policy through Greater Niagara FCU protects your significant investment so you can rest easy. Our loan officers are prepared to answer any and all of your questions, including rates, premiums, coverages, and more. Let’s bridge the greater insurance gap together.