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What You Need to Know about Gap Insurance in Used Cars


There are a many different kinds of car insurances up for grabs in the market. People who are shopping for useful coverage policies should take an insightful look at every policy available from insuring companies. One particular coverage policy which is not popular to policy shoppers is the gap auto insurance.

The gap coverage policy is useful for people who have leased a car or for those who are buying a used car. If a person avails of the gap policy, the difference between the worth of the car and the amount the person still owes on the car will be covered by the insurance. In the event that the car is stolen or damaged to the point of no repair, the gap coverage policy comes in handy.

The use of the gap coverage policy can be seen in the following instance: James bought a car that is worth $20,000 but still owes $25,000 total of car payments. If James’ car is stolen or irreversibly damaged due to an accident, his car insurance will reimburse the $20,000. Because of the fact that James still owes $25,000 to the car financing company, he is still $5,000 short even if the car is no longer with him or is of no use.

If James purchased a gap coverage policy, the policy will cover the remaining $5,000 gap which is the difference between the money provided by the reimbursement and the amount that the policy owner still owes on the car. The policy owner is therefore saved from further costs and will avoid being in a losing situation. It is a losing situation because the car owner loses his car and will still have to pay the amount he owes even if it is already unusable.

Gaps are usually given for used cars and are not applicable with new cars. When you are mulling over purchasing gaps, you must take into consideration that not all car dealers offer gap policies with their cars. If you are seriously thinking of finding used car dealers which offer gaps along with their cars, check the net but make sure that the dealers you find there are authentic.

You should also make sure that the car is not more than eight years old because they can no longer be given gap. This may be because it’s pretty sure that somehow, cars this old will have to breakdown or will easily be destroyed. Also, ask for the length of time at which the policy is effective because car insurance companies differ in this aspect.

One important feature of the gap policy is that, the car purchased should be loaned and not purchased in cash, otherwise, the essence of the policy will be useless. Remember that the policy covers the gap between the amount that you owe on the car loan and the real value of the car. Therefore if there is no gap between these amounts, then the policy will have nothing to pay for.

Finally, take the gap quotes of the different car insurance companies you’re planning to purchase from since they employ different prices. Also, make sure that you really need the policy so that you will not end up losing the money you are going to put up for it.

Many things can be learned by going to the internet which includes knowing GAP’s advantages and disadvantages. Search sites that provide for your car insurance online using a car insurance calculator. You are sure to get the best auto insurance quotes in your life.