What Is Gap Insurance On A Car

Gap insurance covers the difference the gap between what your vehicle is worth and how much you owe on the car.

What is gap insurance on a car. Furthermore car insurance requirements vary from state to state so you really need to talk to an insurance company to understand the bare minimum of. Guaranteed asset protection gap insurance also known as gaps was established in the north american financial industrygap insurance protects the borrower if the car is totaled by paying the remaining difference between the actual cash value of a vehicle and the balance still owed on the financing. Gap insurance protects you against loss if the value of your vehicle is less than what you owe on your loan. Gap coverage is mainly used on new and used small vehicles cars and trucks and heavy trucks.

Gap insurance often flogged by pushy car salesmen covers the difference between the amount you paid for your car and the amount an insurance company would give you if it was written off or stolen. To understand what gap car insurance is and how it works its important to understand car insurance and car financing. You choose the car you want to purchase get the finance agreement pitch and then move to discussing extras like gap insurance. Standard car insurance does not pay what you owe on a car.

This guide explains the basics of gap or guaranteed asset protection insurance to give it its formal. Gap insurance comes into play if your car is stolen or totaled damaged to the point that repair would cost more than the car is worth before the car is paid off. The usual pitch is cloaked in terms of urgency but the underlying narrative tells a much different story. Car loans and gap insurance.

Is working as a gap insurance introducer for ala ib limited trading as ala insurance brokers who is authorised and regulated by the financial conduct authority. Standard car insurance only covers the cash value. Car insurance typically pays actual cash value acv unless specified otherwise. Fca firm reference no.