What is Gap Insurance?

• Gap Insurance: Protects you financially if your vehicle depreciates faster than you can pay off your loan, covering the gap between your car’s worth and what you owe on it.

How Gap Insurance Protects You from Financial Losses

• Coverage: Pays the difference between your car's current market value and the outstanding balance on your loan in case of a total loss or theft.

How Gap Insurance Works

1. Vehicle Depreciation: New vehicles can depreciate up to 20% as soon as they leave the lot; typically, vehicles lose around 20% of their value in the first year.
2. Standard Insurance Limitations: Standard policies cover only the depreciated value of your car (its current market value) at the time of a claim.
3. Gap Insurance Advantage: Covers the difference between the car’s current value and your remaining loan balance, protecting you from out-of-pocket expenses.

When to Consider Buying Gap Insurance

1. If you put down less than 20% as a down payment.
2. If you have a loan term longer than 60 months.
3. If your vehicle depreciates faster than average.
4. If you rolled an old car loan into a new one.

Where to Buy Gap Insurance

• Car Dealer: Many dealerships offer gap insurance.
• Insurance Providers: If not available through the dealer, most vehicle insurance companies provide gap insurance at varying rates.

Do you know about Gap insurance? What is GAP insurance? How Gap insurance Protect you from financial loses.?

Gap Insurance protect you when you owe on your vehicle which is continuously depreciated in value.

Normally GAP insurance covers the difference between worth or vehicle and owe on it.

How Gap Insurance works for you:

When you buy a new vehicle it may be car, bus or truck then the value of that particular vehicle depreciated sharply. In some cases, the value depreciated by 20% when the vehicle leaves its lot. Maximum Vehicle value depreciated by 20% in a year. The Standard vehicle policy covers the depreciated value of the vehicle. In other words, the Standard Vehicle insurance policy pay the current market value of the car or vehicle at the time of claim.

Sometimes when you pay a small amount as down payment for your vehicle then it may be possible that your loan amount will be higher than your current value of the car with the time.

At the time of accident, the Standard Insurance Policy covers only according to current value of the car. But the Gap Insurance covers the difference between worth of vehicle at present and what you owe on your vehicle or car.

When You should buy a GAP Insurance:

1. When you pay less than 20% as a down payment.
2. When you owe or loan tenure more than 60 month.
3.  When you buy a vehicle, which is depreciated in value more than the average.
4. Rolled your old car loan into a new car loan.

From where you can buy GAP Insurance policy.

Normally your car dealer has the facility to provide GAP insurance. If your dealer doesn’t have this option then you can buy it from any vehicle insurance provider company. Different company may have different price for GAP Insurance.