Consider the following scenario. You’ve been in an automobile accident that has caused so much damage that the insurance company has declared the vehicle totaled. The issue is that it’s a newer car, and you owe money on it. The insurance company has agreed to pay you the current market value of your vehicle at the time of the accident. That is, however, less than the amount you owe on the car right now. You owe money on your loan, and you don’t even own a car.
What Does Guaranteed Asset Protection (GAP) Cover?
It’s not uncommon to find yourself in a situation where you lose your car for whatever reason and owing more than your insurance company can cover. However, with GAP on your auto loan, you won’t have to worry about paying a large amount to pay off your loan. When your vehicle is a total loss, it helps to protect you against out-of-pocket expenses.
Here’s an example of what could happen in the future. With the help of the RefiJet staff, you refinance your auto loan. You decide whether or not to include GAP insurance with your new loan. The automobile gets stolen from your driveway a few months later. The cops are on the lookout for it, but aren’t optimistic. You file a theft claim with your insurance carrier. They agree to file the claim, but argue that the car’s current value is only $15,000. However, you owe $17,000 on your debt.
In this instance, your GAP coverage comes to the rescue with cash assistance. It assists you in covering the $2,000 gap. It will even cover up to $1,000 of your insurance deductible. You’ll be able to pay off the debt and buy a new car as a result.
You would still be without a car if you didn’t have this coverage, and you would still repay your lender $2,000 if you didn’t have it. That’s money you could be putting toward a new car down payment. GAP might be a highly useful product if your loan to value ratio is greater than 80%.
Even if you are an excellent driver, accidents and theft might occur due to no fault of your own.
GAP can help you reduce your risks and make a bad scenario a little easier on your mind and wallet.
What You Can Expect from Guaranteed Asset Protection Coverage
We provide GAP insurance from industry-leading vendors at RefiJet. Several plans may be available to you. Each one has its own distinct characteristics. One of our Financial Services Representatives can assist you in determining whether GAP is ideal for you and which features to look for. Some have features like assisting with your insurance deductible. For example, in the cases above, you may have a $1,000 insurance deductible to pay before the insurer pays the balance. GAP may be able to help you cover part of those fees, lowering your out-of-pocket spending even more.
Right now, do your homework to see how much protection you have. You could also want to look over your auto insurance coverage to see how they would handle such a situation. Then turn to RefiJet for GAP assistance.
Should You Include It on Your Auto Refinance with Us?
Speak with one of our representatives about the advantages it provides. RefiJet simplifies the entire procedure for you.
- GAP will not transfer to the new loan if you already have it. You have the option to cancel it, and you may be entitled to a pro-rated return.
- The cost of GAP insurance may be quite low, especially if it is required to pay out at some point during your vehicle’s ownership. In such situations, it might save you hundreds of dollars.
Do not get on the road until you’ve figured out your remortgage alternatives and whether adding GAP to your loan to protect your vehicle is a good idea. GAP is one of them. It might be able to assist you in reducing your financial risk.
Talk to Our Team When You Request a Refinance Loan
When thinking about how GAP can help you, keep in mind that this, together with refinancing your auto loan to a reduced interest rate or monthly payment, could be the finest financial choice you can make right now. Take the time to think about if GAP is right for you. You could discover that this is a simple investment to make.
Does the original gap insurance stay after refinancing?
Gap insurance is linked to a specific auto loan and is designed to cover a recently purchased vehicle in the case of an accident that results in the vehicle being declared a total loss. It can’t be re-assigned or transferred to another loan, even if it’s for the same vehicle. Your loan is paid off when you refinance, and your gap coverage stops. You’ll need to get a new policy if you want to keep your gap insurance on your automobile.
What happens with gap insurance when you refinance?
GAP insurance is linked to a specific vehicle loan. It can’t be re-assigned or transferred to another loan, even if it’s for the same vehicle. Your loan is paid off and your GAP coverage ceases when you refinance. Typically, the provider will offer a prorated reimbursement for the remaining GAP insurance period. You should obtain a new policy for peace of mind and to ensure that you are covered from a huge deficiency balance in the case of a total loss.
Does refinancing a car affect gap insurance?
You’re refinancing the loan on the vehicle, not the gap insurance, when you refinance a car loan with gap insurance coverage. This is because the gap insurance policy was linked to the initial loan, and if that loan is paid off, the gap insurance policy is no longer valid.
Is Gap insurance a good idea?
Gap insurance is absolutely worth the money if you owe more on your car than it is now worth at any point in time. If you put down less than 20% on a car, you should consider getting gap insurance for at least the first couple of years. You should owe less on the car than it is worth by that time.
What is the average refund for gap insurance?
To figure out how much you owe, multiply the amount you paid for the insurance by the number of months it covers. The monthly payment would be $27.78 if you paid $1,000 for 36 months of insurance coverage. If you paid off the car after 24 months, you’d have 12 months left, resulting in a $333.36 return for the time you didn’t utilize the policy.
Can u get a refund on gap insurance?
Contact the insurance company and provide the policy number as well as paperwork proving the automobile was traded in, sold, or paid off early to receive a gap insurance refund. Refunds for gap insurance are normally only available for policies that have been paid in full up front. Drivers who have never submitted a gap insurance claim are not eligible for a reimbursement.
You may be able to get a complete refund minus any cancellation costs if you cancel within 30 days of the policy’s commencement date. In other circumstances, you may only be able to get a partial refund. The specifics will be determined by your insurance and state legislation.
How is gap insurance refund calculated?
Check the policy expiration date and how much you paid for GAP insurance, then divide that amount by the number of months your policy covers to determine your due GAP refund. Multiply the monthly price by the number of months you won’t be utilizing the premiums to calculate your due refund.
When Should I refinance a car loan?
Waiting at least six months after the end of your loan term gives your credit score more time to recover from any temporary dips. If you want to lower your interest rate and monthly payment, you should wait until your credit score allows you to qualify for a lower rate than the one you have now.
How many times can you refinance your car?
Refinancing your car loan can be a smart move if you do the numbers and see that you have something to gain. You may have better credit, find more appealing interest rates, or be struggling to make your payments and need a means to reduce your monthly vehicle bill. The true question is whether a new loan, with its associated fees, will save money over the course of the time it takes to buy the car outright.
But what if you’ve already refinanced your car loan and want to do it again?
How long to wait before refinancing your auto loan
The good news is that auto owners can refinance their vehicles as many times as they desire, as long as they can find a lender prepared to approve them for a new loan.
If you find you can get a better loan after you bring your car home from the dealership, you can refinance it right away. There are no legal restrictions on later financing a car, though it may get more difficult to find a willing lender as the years and miles on the vehicle accumulate. Each lender has their own set of criteria. At