Before you drive your brand new car off the lot, you're bound to hear a lot about "the GAP." For those of you who have survived the new car buying gambit, the last thing on your mind is insurance - specifically, GAP Insurance. Unless the dealership has incentivized your new purchase by covering the GAP, chances are your new car doesn't have the coverage it needs to hit the road.
It should come as no surprise to new car buyers that the instant your tires meet the road, your car will depreciate in value. While the percentage of devaluation varies, for the most part it ranges somewhere between 20% and 30%. Now, if you were to wreck your new car right out of the box, keep in mind you would only be reimbursed for the market value of your car, not what you paid! So, if you paid $40,000 for your new vehicle and wrecked it, you would be responsible for the 20% depreciation, meaning you would have to find a way of paying $8,000!
This is where GAP Insurance becomes vital. Guaranteed Auto Protection (GAP) Insurance is meant to buffer the difference between how much you owe on the car, and how much it's actually worth at the time you have a claim. While it's relatively easy to afford, many new car buyers - in a valiant effort to trim costs - will forego the GAP. This is a big, big mistake.
It could be the case your current auto policy offers GAP Insurance. This depends on your carrier and the specific bylines of your policy. Whatever you do, don't assume you're covered and drive off the lot in a mad dash to show off your new purchase. Most savvy salespersons will throw GAP into the tax, title, license bundle - but some may not. Indeed, some customers think they can do without it. The best policy is to review your current one and to contact us.
We can help steer you in the right direction and help you fill in the GAP.