Did you know that your insurance company might not pay off your entire loan balance if your new vehicle is totaled or stolen? If your vehicle is stolen or involved in a catastrophic accident, GAP Plus coverage protects you. Only the vehicle’s worth is covered by insurance coverage. The gap between the vehicle’s real cash value and the remaining loan debt is covered by GAP Plus coverage.
During the first few years after purchase, the value of a new automobile rapidly depreciates. Frequently, the loan sum will be greater than the vehicle’s worth. Guaranteed Asset Protection fills in the “gap” between the vehicle’s current value and the amount owing on it. If you finance your replacement vehicle through Riverfront, it will also give you an extra $1,000 to help you buy it. Auto Deductible Reimbursement is included in the GAP Plus policy at no additional cost (ADR). On a non-total loss insurance claim, the ADR coverage will reimburse you up to $500.00.
What does gap plus cover?
Guaranteed Asset Protection Plus (GAP) bridges the gap between what your car insurance will cover and what you owe on your loan, protecting you from unexpected out-of-pocket costs if your car is declared a total loss.
What is the difference between Gap and Gap Plus?
If you finance within 90 days following the GAP claim settlement, you will receive a $1,000 discount on your next vehicle loan at this institution. GAP PLUS coverage is normally included in your vehicle loan payment, and most types of vehicles are eligible.
What is not covered by gap insurance?
In a nutshell, gap insurance isn’t “super coverage” that protects you if you don’t have the finest auto insurance or can’t make your loan payments.
What is the purpose of gap insurance? It pays the difference between what you owe on the car and what it’s worth to an insurance company in the event of a total loss. That is all there is to it.
You could be upside-down (debt more than the car is worth) before you leave the dealership if you didn’t put much down and had your taxes and licensing fees incorporated into your loan.
For instance, suppose you purchase a car for $24,000 that costs $26,500 after taxes and fees. You put down $1,000, sign your finance documents, obtain a car insurance coverage, and drive away from the dealership.
Your “new car” has been totaled for about a year. You file a collision claim with your insurance company and learn that your vehicle’s actual cash worth is only $19,200. This means that once your $500 deductible is deducted, your car insurance provider will pay your lienholder $18,700.
This entire sum would be covered if you had a gap insurance policy that included deductible coverage. If you don’t have gap insurance, you’ll have to pay the difference out of pocket for a car you no longer own – which is painful because you’ll have to buy another car as well.
The term “guaranteed auto protection” or “guaranteed asset protection” is an acronym for “guaranteed auto protection” or “guaranteed asset protection.” Its purpose is to give protection during the early years of the loan, when the loan exceeds the car’s worth.
Gap insurance is available via the dealership, your lender, some auto insurance providers, or a stand-alone gap insurance provider. If you have a lease, gap insurance may have been included in the contract automatically.
Gap insurance is typically offered when you sign your loan agreements, and it can be included in the purchase paperwork as well. The gap insurance payment is normally a flat cost of roughly $500 to $700 when purchased this way.
According to Liz Weston, a credit expert and MSN Money personal finance columnist, buying through a dealer isn’t always a wise choice. “Gap is most expensive if you buy it at the dealership,” Weston points out, “since it enters into the loan and is then extra interest.”
For the most up-to-date information on pricing and availability, contact your personal auto insurer. Due to the various rating systems used by insurance companies, gap insurance premiums often range from 5% to 6% of your physical damage coverage costs. Gap insurance will add roughly $25 to your overall premium if your collision and comprehensive charges are $500.
You can compare the cost of coverage by checking with stand-alone gap insurance companies. Weston suggests checking with A.M. Best or another rating organization before getting gap insurance from a stand-alone gap provider to ensure that the gap insurance firm is stable and reliable.
Is gap insurance appropriate for you? “I believe so,” Weston responds. “Gap insurance would be required unless you have enough money in the bank to pay off the sum of your loan over the car’s value, which most people don’t.”
Gap coverage, according to Weston, is most important for people who are underwater on their loans and have minimal savings. She claims that automobile owners who don’t put down 20% or have a loan that is longer than four years are likely underwater, making gap insurance worthwhile.
If you’re not sure how far underwater you are, use Edmunds or Kelley Blue Book to determine the value of your automobile. Pick a spot in the middle of the trade-in and private sale amounts to get a roughly accurate valuation for your car.
What can you claim on gap insurance?
The term “gap” refers to asset protection that is assured. In the event of a total loss claim, this type of insurance pays the difference between the cash worth of your vehicle and the amount you currently owe in auto payments (such as if your vehicle is totaled or stolen).
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.
Do I need gap insurance if I have full coverage?
If you have complete coverage but still owe money on a car loan or lease, you will require gap insurance. Even if you have full coverage, gap insurance is required since full coverage does not cover the difference between what you owe on a loan/lease and the car’s actual cash value.
What is NAS gap?
When your car is totaled, GAP Protection pays the difference between the amount owed* on your retail installment sales contract/lease agreement and the actual cash value of your vehicle.
GAP is a one-of-a-kind insurance policy that protects you from financial ruin if your car is stolen or damaged.
The reason for this is that as your car ages, its actual cash value (ACV) decreases, while your lease or loan balance may remain higher than the amount paid by the insurance company. The gap between what the insurance company pays you and what you owe becomes your responsibility.
Many consumers are unaware that they are accountable for the vehicle’s outstanding debt. When your car is totaled, GAP Protection pays the difference between the amount owed* on your retail installment sales contract/lease agreement and the actual cash value of your vehicle. Even your deductible is covered in many states!
GAP Plus comes with a $1,000 bonus towards the purchase of a new car. In some states, GAP Plus is not accessible.
Protect Your Investment with NAS GAP Protection.
* Missed payments, payment extensions, deferred payments, accrued interest, late fees, disposal fees, penalty penalties, early termination fees, and finance charges incurred after the date of loss are not included in the amount owed. Depending on the plan you choose, monies financed in excess of 125 percent or 150 percent of the MSRP of your new car or the NADA retail value of your used car will not be waived, and you will still be responsible for these over-financed amounts even if your car is totaled. Coverages, exclusions, and limitations are detailed in the contract.
Does gap cover cracked windshields?
Is windshield replacement covered by gap insurance? Windshield repair and replacement are not covered by gap insurance. If your car is totaled, gap insurance pays the difference between the actual cash value and the remaining balance on your loan or lease.
Do I still have to make payments on a totaled car with gap insurance?
If your automobile is totaled and you still owe money on the loan, your insurer will pay your lender for the car’s worth, and you will be responsible for any leftover balance if the check is less than the loan amount. Gap insurance will cover the difference between the car’s value and the loan debt if you have it. Otherwise, you’ll have to keep making payments until your loan balance is zero.
If your car is totaled and another driver is at fault, the other driver’s liability insurance will cover the cost of the car up to their policy limits. You can file a collision claim if you were at fault. You can find out if you still owe money on your loan after you receive a settlement from the insurance company.
If you already acquired coverage and still owe money to your lender, you can make a gap insurance claim as soon as your lender receives the insurance payment. Make sure you follow all of your policy’s instructions. Some gap insurance policies, for example, require you to continue making payments to your lender while your claim is processed.
If you don’t have gap insurance and your total loss check doesn’t cover your loan sum, your alternatives are restricted. You can try to persuade the insurance provider to raise their estimate of the value of your car. You will, however, need proof that your automobile is worth more than the insurer estimated, and there is no assurance that you will receive more money. Otherwise, you’ll have to keep making payments, though you could request a payment plan from your lender.
Will gap insurance pay off my loan?
If your automobile is totaled or stolen, and you owe more than the car’s depreciated worth, gap insurance might help you pay down your loan. Gap insurance bridges the gap between your car’s depreciated value and the amount you still owe on it.