You’ve heard the horror stories this winter about accidents and pileups, but have you done anything to protect yourself if something happens to your vehicle? Most people look at GAP insurance as a waste of money… until they really need it.
Recently, Fox featured a special clip with Bob Massi about Guaranteed Asset Protection (GAP) insurance. You can watch the video here.
Here’s what you need to know about GAP and how it can help you.
What is GAP Insurance?
GAP insurance covers the difference between your insurance company’s payout and the balance of your loan in the event your vehicle is stolen or broken beyond repair. In a nutshell: it covers the gap.
Most insurance companies only pay the cash value of the vehicle at the time of loss. This value often falls short of the remaining loan balance – sometimes by thousands of dollars.
What’s Your Car’s Cash Value?
Most people don’t realize they need GAP insurance because they don’t understand how their insurance company values their vehicle.
Philip Reed, Senior Consumer Advice Editor at Edmunds.com, reports the average new vehicle will lose 30% of its value in the first year. By three years, that percentage jumps to 50%. Your loan, of course, doesn’t follow the same pattern.
Other Terms & Conditions
You’ll find different rates and terms depending on where you go. Aspire offers GAP insurance with the following terms:
- Protection is provided for the term of the loan up to 84 months
- No model, mileage or year restriction, as long as the car’s value is published in a regular NADA publication
- Salvaged or reconstructed title vehicles are not eligible
- You must file your GAP insurance claim within 60 days of the insurance settlement
- $50,000 maximum payout
Some things GAP insurance does not cover:
- Any liability charges, such as any repairs for the other person’s vehicle or money owed in a lawsuit
- Repairs for your vehicle
- Car payments if you become sick or disabled
Review your GAP contract for all restrictions.
Learn more about Aspire FCU GAP insurance here.