The last thing we want to happen with our vehicle is to be ruined in a car accident or even stolen. These two situations are real nightmare for all car owners. However, there is a solution here. The solution we are talking about is the gap insurance.
Copy of Accident
This specific type of insurance is like some kind of protection for drivers who have leased or financed cars. This plan will enable you to get a replacement car, without any additional costs. This solution will be perfect for people who have relatively new vehicles- in some cases it pays off if you have a car up to a couple of years old. If your vehicle is older than five years, then you should consider taking some other insurance plan.
Here are a few basic things you have to understand about the Guaranteed Asset Protection. First of all, it is not the obligatory type of insurance, so nobody can force you to buy it. It is all up to you and your judgment. Of course, there are many people who think this is just another unnecessary expense that should be avoided. As long as everything is Ok with your car, we cannot say anything against these people. But what should we do if someone steals your car? Or if it is toiled?
Regular insurance plans will not provide you replacement vehicle, especially if it is leased or financed. In these situations, gap insurance will not be an unnecessary expense, but a wise investment. As you can see, everything depends on the perspective and our point of view. If we want to be safe no matter what, then we should add the gap insurance to our regular coverage plan, because it is the only way we can be sure that we will get replacement car in the case of the accident.
What does this Actually Mean?
This means that only this type of insurance can allow you to bridge the gap between actual value of your car and value of you loan. You just have to understand that insurance companies will cover you only the actual value, which is always lower that the value of a new replacement vehicle.
Here is one example. Let’ say that you paid some $10.000 for a new motor vehicle and that you have only standard insurance policy. Everything was perfect until one day, when you had an accident. You brand new motor is totally ruined, but you are not worried because you have your insurance. You will get a new motor, right? Wrong. The insurance company will give you $7.000 max, because it is the actual value of your vehicle. So, you will need $3.000 if you want to have the same motor again. Regular insurance plans cannot help you here. But gap insurance can.
As we said, it will help you to bridge this gap of $3.000, and get back on the road. So, what you think now? Is gap insurance another expense we should avoid or investment for our future. We think you already know the answer.