Gap cover is also widely known as gap protection. It covers the difference in the amount that you owe and the amount that the car is worth. This policy usually covers the cost of repair or replacement of a car in case of theft to the total value of the car. However, if there is a difference in the total market value of the car and the amount owed on your car loan then that difference or gap is not covered by the insurance company. The gap protection is essentially a debt cancellation agreement that covers the difference between the value of the vehicle and the vehicle loan.

The value of a car is sometimes less than what you owe on the loan due to certain factors like depreciation, taking a loan that has an extended term and borrowing more than the purchase price. So, if the car is damaged, the insurance company will not pay more than what the car was worth before the accident. The situation in which you need gap insurance is known as going upside down.

The Need For Gap Cover

You usually need gap cover when buying a new car. Before you buy gap insurance, you must make sure you are not already covered because some companies include the coverage in the agreement for their own protection. Gap coverage can be bought through lenders that finance the purchase of the vehicle or through insurance companies. Gap protection, when bought from a lender other than your insurance company, is a one-time charge. However, if it is bought from your insurance company, it is billed as an addition to your regular premium. If you get the gap cover from an insurance company, you pay for it every time you pay the premium, until you cancel it. Therefore, you should keep calculating the premium every now and then to avoid paying additional expenses. Not all insurance policies are the same. Some reimburse the insurance deductible while others offer vehicle replacement.

Things To Consider With Gap Cover

There are a few things that you need to consider when purchasing gap cover. Firstly, some car dealers charge more than others for gap protection. Therefore, you must do your own thorough research of all the sources before deciding on one. Also, if you are buying the insurance online, use out free insurance quotes system and research the available GAP options and costs among multiple insurance companies. Make sure the insurance covers you for all types of losses such as theft, natural disasters and accidents.

Not everyone can afford to buy a brand new car just like that. That is why many people resort to some form of personal finance such as loans to fund their purchase. This is where GAP coverage option helps. If it’s included in your policy, it will cover the additional depreciation costs which is not included by default in most insurance policies. Most insurance companies will strongly recommend having this option for new cars. However, some car garages will require it before selling the car to ensure that it’s paid off by GAP insurance in case of an accident.Gap Cover

Gap cover is also widely known as gap protection. It covers the difference in the amount that you owe and the amount that the car is worth. This policy usually covers the cost of repair or replacement of a car in case of theft to the total value of the car. However, if there is a difference in the total market value of the car and the amount owed on your car loan then that difference or gap is not covered by the insurance company. The gap protection is essentially a debt cancellation agreement that covers the difference between the value of the vehicle and the vehicle loan.

The value of a car is sometimes less than what you owe on the loan due to certain factors like depreciation, taking a loan that has an extended term and borrowing more than the purchase price. So, if the car is damaged, the insurance company will not pay more than what the car was worth before the accident. The situation in which you need gap insurance is known as going upside down.

The Need For Gap Cover

You usually need gap cover when buying a new car. Before you buy gap insurance, you must make sure you are not already covered because some companies include the coverage in the agreement for their own protection. Gap coverage can be bought through lenders that finance the purchase of the vehicle or through insurance companies. Gap protection, when bought from a lender other than your insurance company, is a one-time charge. However, if it is bought from your insurance company, it is billed as an addition to your regular premium. If you get the gap cover from an insurance company, you pay for it every time you pay the premium, until you cancel it. Therefore, you should keep calculating the premium every now and then to avoid paying additional expenses. Not all insurance policies are the same. Some reimburse the insurance deductible while others offer vehicle replacement.

Things To Consider With Gap Cover

There are a few things that you need to consider when purchasing gap cover. Firstly, some car dealers charge more than others for gap protection. Therefore, you must do your own thorough research of all the sources before deciding on one. Also, if you are buying the insurance online, use out free insurance quotes system and research the available GAP options and costs among multiple insurance companies. Make sure the insurance covers you for all types of losses such as theft, natural disasters and accidents.

Not everyone can afford to buy a brand new car just like that. That is why many people resort to some form of personal finance such as loans to fund their purchase. This is where GAP coverage option helps. If it’s included in your policy, it will cover the additional depreciation costs which is not included by default in most insurance policies. Most insurance companies will strongly recommend having this option for new cars. However, some car garages will require it before selling the car to ensure that it’s paid off by GAP insurance in case of an accident.