Car Insurance Guide 2020 – What Is GAP Insurance And When Drivers Should Purchase It
LOS ANGELES, CA / ACCESSWIRE / January 14, 2020 / Compare-autoinsurance.org has launched a new blog post that explains the benefits of GAP auto insurance and why drivers need this coverage.
For more info and free quotes, please visit https://compare-autoinsurance.org/what-are-the-benefits-of-gap-insurance-and-when-you-need-it/
Purchasing a brand-new vehicle can be a very exciting moment for a driver. On the other hand, totaling the recently purchased car can be unpleasant for anyone. In this case, the insurance company will only reimburse the actual cash value of the vehicle at the time of the loss. This means that the driver will get less money than what he paid on the vehicle and he will remain indebted to the lienholder. In this situation, GAP insurance might be helpful. GAP insurance will pay for the difference that is between the actual cash value of a vehicle at the time of loss and what the driver owes to the bank or lender.
Drivers should purchase GAP insurance in the following situations:
The financed car depreciates quickly. New vehicles lose 20% of their value in the first year after the purchase. This means that after three years of driving, a regular vehicle will be worth only 40% of the original purchase price. However, some models depreciate even faster and they can lose 75% of their value after three years.
The driver has a long-term loan. Policyholders that took a loan on their vehicle that is longer than 60 months are strongly recommended to purchase GAP insurance. In their situation, it will take longer for the gap between what they owe on the vehicle and the actual cash value of that vehicle to disappear.
The vehicle is leased. Almost all lenders will require GAP insurance to be purchased, alongside comprehensive and collision coverage.
The car is frequently used. Vehicles that are driven for more than 15,000 miles per year, depreciate more quickly.
If the driver wants to replace the lost car with a brand-new one. The comprehensive and collision coverage is enough to replace a lost vehicle with another one of similar age and condition. However, for some drivers, this is not enough and they want to obtain a brand-new vehicle instead. In this situation, GAP insurance is the answer.
For additional info, money-saving tips and free car insurance quotes, visit https://compare-autoinsurance.org/
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"GAP insurance can protect drivers that remain indebted after their vehicles got stolen or totaled in a crash", said Russell Rabichev, Marketing Director of Internet Marketing Company.
SOURCE: Internet Marketing Company