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GAP stands for Guaranteed Auto Protection
Have you ever wondered what would happen if you had an accident a week after buying a new car? Most of us probably think that there is no possible way we could get into an accident less than a year after buying the car, at least not one that would total it. Unfortunately, luck does not work that way, and too many people do not want to get gap insurance for their vehicles, and wind up paying out of their pocket for a loan on their car, a car that they do not even own.
Lenders do not particularly care about why you took the money, or what happens after wards. The only thing they care about is that you took out a loan, and you now have the obligation to pay it back. This means that even if you have made your car for any reason you are still responsible for repaying the amount of the loan in full reasonable request, until you consider the fact that if you have not noticed it for a long time that the loan can be worth more than the cost of your car! That’s why you need GAP insurance.
Did you know that your car starts to fall in value the moment it leaves the lot of a dealer? No, probably not. Most people do not. This is not a popular concept, so it tends to one that dealers are down, when you sign contracts. But what you do not know can cost you thousands! In extreme cases, the cost of the new car could fall up to 30% during the week to leave the dealer when he was a working car, not the decoration of the car lot. Since your insurance company will only pay the current value of the blue book the car when they cut you a check for “total” the car you will still be paying that 30% of his own pocket. GAP insurance will pick up the tab for that 30% and allow you to withdraw from the deal free and clear. (That’s why many lenders make you buy GAP insurance as a mandatory part of your contract as a borrower.)
Think about it. If you are caught without gap insurance after an accident, you’re probably still going to stay with the loan payment, which puts the drain on your resources, and you probably will not get another until it’s paid off. This means that no car and no money to buy another. It’s a bad situation all the way around. Buying gap insurance can not help you buy another car, but it will leave the door open for allowing to take another loan, when the dust clears. With GAP Insurance, you can get away from your bank account and your pride is firmly in place.
