What is GAP Coverage and do I need it?
Simply put, GAP coverage is an optional feature that will cover the “gap” between what your insurance will pay and the amount you owe in the event your vehicle is totaled or stolen. The last thing you would want to do after one of these unfortunate events is to have to pay out of pocket for the damage. Although we hope this never happens to you, GAP coverage reduces your financial risk in either of these events. One main reason we encourage people to add Guaranteed Asset Protection is due to the fact that the second you leave the lot, the value of your car decreases. This means that the amount you paid for your car is more than what it’s resale value is.
Consider this example: You are driving to work along your normal route when another driver runs a red light and T-bones you. Your car is completely totaled and you were already upside-down on your car loan. Do you want to deal with the financial impact on top of your already frustrated emotions? How do you plan on paying for this?
These are the questions you should be considering when looking into GAP. There is, of course, the possibility that nothing ever happens to your car and you didn’t use the GAP coverage you paid for. But, is that a risk you want to take?
How do I know what company to go with?
When you purchase a vehicle from a dealership they are going to ask you if you would like Guaranteed Asset Protection coverage. You can also look into coverage with your insurance provider – Safeco, Progressive, etc. Another option, which is where we come in, is to go through a third-party provider. Here at RefiJet, we work with industry-leading providers of GAP coverage. Due to this, we can negotiate a great rate for you which the cost could be lower than what you might be able to get through a dealership or individual lenders.
Can I add GAP Coverage Later On?
Yes, you can! If you have been making multiple payments on your loan and have a decent credit score, refinancing may be a great option for you! In the event that you decide to refinance your auto loan, you could both, decrease your loan payment/overall APR, and add GAP insurance to your new loan. GAP will only add a few more dollars to your monthly payment. If you already have GAP coverage, we can help you cancel it. By law, your current GAP contract will not transfer to your new loan; however, you might be entitled to a pro-rated refund.