Insurance Experts Explain What Is Guaranteed Auto Protection Insurance
LOS ANGELES, Nov. 16, 2018 /PRNewswire-iReach/ -- Lowcostcarinsuranceprice.com has released a new blog post that explains more about Guaranteed Auto Protection (GAP) insurance and why it is important.
GAP insurance is designed to cover the unpaid balance of a car loan, should the vehicle be destroyed before fully owned by the driver. Visit http://lowcostcarinsuranceprice.com/ for more car insurance info and free quotes.
GAP insurance may be offered when purchasing a vehicle. A lender may offer this coverage, as a measure of additional financial safety. In the vast majority of cases, the driver is not required to buy GAP coverage. However, if the lender asks it in order to qualify for financing, the cost of the GAP insurance must be included in the finance charge and reflected in the disclosed annual percentage rate (APR). GAP insurance can be excluded from the finance charge and APR if it is optional.
Value depreciation is the main reason why drivers should buy GAP coverage. As soon as a car is bought, it starts to depreciate. In the case of loaned cars, this may be really problematic. When a loaned car is totaled, the insurer will only pay the ACV (Actual Cash Value). The ACV may be really low when compared with the remaining loan debts. GAP coverage will pay the difference between ACV and the loan balance.
Classical example: If a leased car with an ACV of $20,000 is totaled, the auto policy would pay $20,000 minus deductibles. However, if the lease still had $25,000 outstanding, the insured would be liable for the extra $5,000. GAP insurance would pay the extra $5,000 to the leasing company.
When it makes sense to buy GAP insurance. It is recommended to purchase GAP coverage in the following situations:
- Purchasing or leasing a new or slightly used vehicle.
- Buying a really expensive car.
- Financing a new or used vehicle without a large down payment, creating a "gap" between the vehicle's actual value and loan amount.
- When the driver does not have enough money to cover the difference between the amount he owes on his loan and the actual cash value if the car is stolen or totaled.
"GAP insurance is a really useful coverage and it can save the owners of new cars from paying outstanding loan balance. Visit our website for more car insurance info and free quotes", ", said Russell Rabichev, Marketing Director of Internet Marketing Company.
Lowcostcarinsuranceprice.com is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc.
For more information, please visit http://lowcostcarinsuranceprice.com/
Media Contact: Russell Rabichev, Internet Marketing Company, 8183593898, [email protected]
News distributed by PR Newswire iReach: https://ireach.prnewswire.com
SOURCE Lowcostcarinsuranceprice.com
iReach LastName, iReachCompany, 111-222-3333, [email protected]
Share this article