GAP insurance is something you may have heard of when shopping for your new used car. Whether you know the ins and outs or haven’t heard of it before, it can be tricky to know whether or not it is worth taking out an agreement with this. Here is everything you need to know…
What is GAP insurance?
GAP stands for guaranteed asset protection and so GAP insurance can act as peace of mind should the worst happen. GAP insurance could be needed in the case of an accident or your car being written off. It bridges the gap between what your car is worth currently, and what is owed on the finance agreement or what you paid for it, depending on the type of cover and the agreement you go for.
GAP insurance can be a help if you have a balance left to pay and the insurance company does not deem your car worth that amount, which can often happen if you have taken out car finance and there is APR and other fees to be factored into it.
Is it worth it?
Whether or not GAP insurance is worth it will depend largely on what you require and how much your car is worth. If the car is low in value then GAP insurance will probably not be too helpful, but if there is a higher value car in the mix and the APR is great, adding a lot of interest onto the vehicle, then getting GAP insurance can be beneficial.
It is the sort of thing you never hope to use but it can act as peace of mind if you are worrying about how you would continue to pay for the car if it was written off. A lot of people think that if the car is written off then the finance agreement is too, but this is not true and you would still be rewired to pay for it, to the end of the term or until the balance is paid off.
How can it benefit me?
If your car was to be written off, and the insurance company gave a sum that wasn’t close to what you owe, GAP insurance can bridge that gap. You take it out when you take your finance agreement out or when you buy a car, and it gives you that reassurance that you won’t be left with a lot of debt and no car if there were to be an accident.
We hope that helps you get a handle on GAP insurance, but if you have any questions at all, please get in touch with a member of the team and we will be happy to help you.
At RIX Motors, we are used car specialists based in Warrington, with a wealth of experience in helping people find and fund their dream cars. We are passionate about our customers and we can help with finance and GAP enquiries too. You can view all our used cars online or come and visit us in person.