LOS ANGELES, CA / ACCESSWIRE / December 1, 2020 / Compare-autoinsurance.org (https://compare-autoinsurance.org) is a top auto insurance brokerage website, providing car insurance quotes online from trustworthy agencies all over the United States. This website has recently launched a guide that explains what is GAP insurance and why drivers should buy it.
GAP insurance is designed to cover the unpaid balance of a car loan, should the vehicle be destroyed before fully owned by the driver. Visit https://compare-autoinsurance.org for more car insurance info and free car insurance quotes online. Regarding this policy, drivers should know the following:
- GAP insurance may be offered when purchasing a vehicle. A lender may offer this coverage, as a measure of additional financial safety. In the vast majority of cases, the driver is not required to buy GAP coverage. However, if the lender asks it in order to qualify for financing, the cost of the GAP insurance must be included in the finance charge and reflected in the disclosed annual percentage rate (APR). GAP insurance can be excluded from the finance charge and APR if it is optional.
- Value depreciation is the main reason why drivers should buy GAP coverage. As soon as a car is bought, it starts to depreciate. In the case of loaned cars, this may be really problematic. When a loaned car is totaled, the insurer will only pay the ACV (Actual Cash Value). The ACV may be really low when compared with the remaining loan debts. GAP coverage will pay the difference between ACV and the loan balance.
Example: If a leased car with an ACV of $20,000 is totaled, the auto policy will pay $20,000 minus deductibles. However, if the lease still had $25,000 outstanding, the insured would be liable for the extra $5,000. GAP insurance would pay the extra $5,000 to the leasing company.
When it makes sense to buy GAP insurance. It is recommended to purchase GAP coverage in the following situations:
- Purchasing or leasing a new or slightly used vehicle.
- Buying a really expensive car.
- Financing a new or used vehicle without a large down payment, creating a 'gap' between the vehicle's actual value and loan amount.
- When the driver does not have enough money to cover the difference between the amount he owes on his loan and the actual cash value if the car is stolen or totaled.
Compare-autoinsurance.org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc.
For more information, please visit https://compare-autoinsurance.org
'GAP insurance is a really beneficial coverage and it can save the owners of new cars from paying outstanding loan balance. Visit our website for more car insurance info and free quotes', ', said Russell Rabichev, Marketing Director of Internet Marketing Company.
SOURCE: Internet Marketing Company
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