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2007-03-12 06:31:39 · 6 answers · asked by holywood45211 1 in Cars & Transportation ➔ Insurance & Registration
It is the difference between the payoff on your loan and the actual cash value of your vehicle. Say you total your vehicle 2 days after you buy it. The value is $15,000 but your loan payoff is $18,000. The gap insurance will pay the $3,000 difference to your bank. Of course, you will have to pay your collision deductible. This is usually very inexpensive to purchase on your auto insurance policy. The average I see is about $30-$50 per year. Get a quote to add it to your insurance before you buy it from the dealer. It could be much cheaper that way.
2007-03-12 06:41:58 · answer #1 · answered by Sue 6 · 1⤊ 0⤋
Gap insurance will insure one for the difference between what one would owe on a vehicle and what an insurance company says it's worth. Depending on the policy, Gap insurance usually covers accidents and thefts, but not all policies are the same so you may want to evaluate the coverages being offered before purchasing Gap insurance,it is usually only available for new cars being financed.
2007-03-12 06:41:52 · answer #2 · answered by can_do_complicated 3 · 0⤊ 0⤋
Gap insurance is used in the case of a total loss of the vehicle.
During a payout the insurance company normally pays you the KBB retail value of the vehicle, which they will subtract wear and tear, and other things. Often this is not enough to cover what a person paid or owes on the vehicle. GAP insurance pays the rest of the amount so you dont have to incur the remaining cost.
2007-03-12 06:40:55 · answer #3 · answered by wolfyss 2 · 0⤊ 0⤋
A type of auto insurance that car owners can buy to protect themselves against losses that can arise when the amount of compensation received from a total loss does not fully cover the amount the insured owes on the vehicle's financing or lease agreement. This situation arises when the balance owed on a car loan is greater than the book value of the vehicle.
2007-03-12 06:45:38 · answer #4 · answered by Alfredo T 2 · 0⤊ 0⤋
the additional insurance that you can buy to cover the "GAP" between what you've paid for your car verses what the blue book value is> Insurance companies pay blue book value)
2007-03-12 06:36:09 · answer #5 · answered by Robert P 6 · 0⤊ 0⤋
In the event your vehicle is wrecked, stolen, etc....it's pays the difference b/w the ACV of the car (what the insurance pays) and the loan balance, less late payments/fees.
2007-03-12 12:52:37 · answer #6 · answered by bundysmom 6 · 0⤊ 0⤋