The value of vehicles depreciates just as fast as an apple falls from a tree. Actually, its value skydives as soon as it is bought and driven out of the sales lot. Well, that is one of the many facts of life that really sucks big time. Yes, automobile value depreciates unbelievably fast and getting involved in a road mishap is the last thing you want to happen. However, what if you figured in an accident five months after you bought your car? Well, there is gap insurance to rescue you.
Not too many people are familiar with this kind of insurance. This is mainly because policy owners and agents hardly ever talk about it in detail when making deals. Gap is actually short for Guaranteed Asset Protection. So, what does this type of insurance cover exactly? Basically, it covers the difference between a vehicle’s market value and the outstanding amount of money you owe on it. Common sense tells that you should get one immediately upon purchasing a car. At this time, its market value remains high. Getting it early on will allow you to get high compensation in case of vehicular accidents or car theft; many thanks to gap insurance.
Moreover, not too many people know that the market value of your car depreciates by as much as 20 percent the moment you buy it and drive out of the lot. In addition, the value of your vehicle depreciates as it stays longer with you. By the time it gets stolen or gets totaled in a serious vehicular accident, providers would only pay you the market price of your car. Getting gap policy assures you that your car will be replaced in case it becomes irreparable. Having such a policy also guards you against opportunistic dealers and insurers.
Gap insurance is affordable, so getting it would not be a problem. You are also assured that your investment will be of good use since it will compensate additional financial assistance in case an insurance company does not give enough protection. However, it is a must to get it immediately after buying a car. You cannot afford to waste any time. When you finally make a decision to get one, your car’s market value would be equal to the amount you owe on it.
If you are the one financing your automobile, is it a wise move to have gap insurance? It largely depends on the policy coverage. Do not apply for it if your regular automobile insurance policy will pay the financed amount in full.
