Getting your vehicle insured is one of the most important things once you have made an automobile purchase. So, how does Guaranteed Auto Protection work, and why is automobile insurance important?
Automobile Insurance or Auto Insurance is mandatory insurance that every vehicle owner should have. Having your vehicle insured helps the owners to cover any physical damages that might occur to the vehicle, up to a specific amount. Auto Insurance has varied levels, and vehicle owners can choose to get the most suitable insurance.
Even though auto insurance is mandatory, there is advanced insurance called GAP. We have discussed how guaranteed auto protection work and is GAP worth your money?
The Difference Between Auto Insurance And GAP
Auto insurance provides coverage for the vehicle in case of physical damage or if the vehicle gets into an accident. However, GAP ensures coverage even if the vehicle undergoes comprehensive damage. It means auto insurance covers collision-related damages, while GAP might cover any money you owe with respect to the vehicle’s current value.
So how does Guaranteed Auto Protection work, and is it worth it to get GAP insurance? Here’s Gap Insurance 101 for you to understand GAP’s working and finance coverage.
Why Is Auto Insurance Mandatory?
Auto Insurance primarily covers any collision-related expenses, medical expenses in case of an injury, and expenses of a liability situation where someone has been damaged through your vehicle.
Basic Auto Insurance covers at least medical, liability, and physical damage expenses, however, vehicle owners can choose to get more things added to their coverage depending on their preferences.
Auto insurance is necessary because it helps vehicle owners from bearing huge expenses in case of an accident or mishap. Auto Insurance also varies for each vehicle, so the answer might vary if you ask how much is insurance on a Dodge Charger? in comparison to some other vehicle.
What Is GAP Insurance?
Why is GAP Insurance different from auto insurance, and how does Guaranteed Auto Protection work?
GAP or Guaranteed Auto Protection insurance is a more comprehensive form of insurance since it can help vehicle owners in obtaining almost the whole amount of the vehicle.
GAP does not entail that the insurance provider is responsible for paying the whole amount of the car you paid. GAP primarily means that your insurance provider might cover the whole expense you owe pertaining to your vehicle after auto insurance coverage in case of an accident or mishap.
If you define the term GAP Insurance or ask how Guaranteed Auto protection work, it can be said that GAP covers or reimburses the amount to a vehicle owner if the lease balance or outstanding loan is greater than the total expenses during a mishap.
Is GAP Worth The Money?
GAP primarily covers any leftover amount you need to pay for your car in case of a total loss. In layman’s term, GAP help in paying the expenses left after the auto insurance has already been used to cover expenses.
So what are the situations in which you will need to get GAP insurance? If you have a car whose market value depreciates faster as it gets more used, you need to get GAP insurance. Similarly, getting a GAP is a better option if you have a longer installment period, and it will take you more than five years to repay the car loan.
Also, if a customer has leased a vehicle or given a down payment that is less than 20%, they will benefit from GAP insurance. If the actual cash value of a vehicle does not depreciate fast, or if a specific model is known to fare well than average cars, the damage expense might get covered through Auto insurance in case of a total loss.
It is beneficial to get GAP insurance if you feel that the value of your car will substantially depreciate with more users or if you have a long installment time period.
Also, Read | Why Is It Important To Have Car Insurance?
That is how Guaranteed Auto protection works and why it might be necessary for some situations. GAP can be considered an extension of Auto insurance that provides vehicle owners with the option to not incur any financial damage in case of a total loss.
Whether you choose to go for GAP or not is totally up to you. However, you can consider whether it is a cost that might help you cover expenses in case of a mishap or not. If your Auto insurance can cover expenses, getting GAP might seem futile. But GAP can also help cover finances so that you do not incur any financial damage in case of a total loss of your vehicle.