Simply put, Guaranteed Auto Protection (GAP) insurance covers the difference between the actual value of your car if it’s totaled and the balance owed on your financing. GAP insurance is good if you finance or lease a car, but you do pay a premium for protection.
Here are some examples:
- You buy a car at $25,000 and you pay $1,000 down, financing $24,000. You drive off the lot and immediately hit someone or someone hits you. Your car is totaled and valued at just $2,000 now. If you have GAP Insurance, that left over $22,000 is paid for and you owe nothing.
- You lease a car for the value agreed upon in the lease: $25,000. The same situation occurs—you drive off the lot and get into a car accident. GAP insurance will cover the difference between the balance you owe and the new value of the car.
It should be noted that the second you drive a car off the lot, it depreciates. Your car may still be brand new, but the value could have dropped. GAP insurance will cover the difference between this new value and the value of the car after the wreck.
GAP Insurance also covers theft, though there is a waiting period after the claim is filed to see if the vehicle can be recovered.
Call Atlanta’s Top Car Injury Lawyers With Questions About Your Car Accident Claim
If you’ve been involved in a car accident and require legal representation, do not hesitate to contact the experience car accident attorneys at Cohen & Sinowski, P.C. Reach out to us online or by phone at 404-800-CASH.