Some lein holders may make it manditory it is not state manditory, it is a good idea though for anyone that is financing 80% or more of their vehicle...If your vehicle totals the insurance company owes you the ACV (actual cash value) only! NOT the loan payoff...GAP covers that GAP (if there is one) between what the carrier pays and your loan payoff...The benefit I guess is obivous once you understand it...without it if you are upside down, you now have no vehicle and are still making payments and then usually rolling that balance on top of your replacement vehicle loan...and the mess starts a new! only worse the second time... _________________ Have you been helped by a poster? Do you want to show your appreciation? YOU CAN !! Just simply click on the donate button and send them some coin!
I have it on my car, it was more for peace of mind for me incase I was in an accident the first year or two. Buying a new car so close to winter made me nervous, so I purchased it.
Gap insurance works as an additional coverage for your car. Gap insurance covers the gap between your policy limit and the loan on the car. It's a worthy choice for new vehicles, as the car value depreciates right after you roll it out of the showroom.
The gap insurance may ensure your peace of mind especially when you are upside down on you car loan.
Most of the gap policies cover collision and car theft. However, the coverage may differ according to the nature of the policy. Hence, you're required to find out about the coverage type before purchasing the plan.
I agree with goodnatured, gap insurance is required more to ensure the peace of mind. The major benefit of the Gap policy is that it frees you from the car loan when your vehicle gets totaled within the first few years of purchase.
You can purchase the gap policy from the dealer, but may not get a good bargain. Hence, for gap insurance too you are required to shop around for better coverage and competitive rate.
The gap insurance isn't very expensive and in most states its available at fairly cheap price, though, in some states the rate may depend upon the volume of the loan.
However, before deciding about the gap policy, you should check it out with your existing auto insurer. Some insurer may have the gap policy inbuilt in the main policy and may be charging you already for it.
GAP insurance isn't available in all the states. The following states do not offer GAP insurance policy,
Connecticut
New York
Vermont
Virginia
Washington
New Mexico
Louisiana, and
New Hampshire
And as I've mentioned in my previous post, in Texas and Nevada the rate of the Gap policy depends upon the amount of the loan.
The Gap insurance, normally, has a duration of 84 months. Gap policies are generally not required on the old cars, however, there are special cases where the insurer may allow you to maintain the Gap policy on an old car as well.
yep, or also a good idea on used ones that you start out upside down...typcially (well always) when buying at a ''we tote the note'' car lot.. _________________ Have you been helped by a poster? Do you want to show your appreciation? YOU CAN !! Just simply click on the donate button and send them some coin!
'Tote the note' car financing is, when the dealer himself plays the role of the financier for the car.
Tote the note financing is often looked down upon by many auto dealers. And there are limited number of the dealers who operate in this manner. Normally the customers with poor credit score and financial conditions prefers to get the tote the note financing.
'Tote the note' is also known as 'buy here pay here'. And often you'll not get quality vehicle with these kind of dealers.
And often you'll not get quality vehicle with these kind of dealers.
Generally the vehicle is over priced by atleast two times, and the interest rate is crazy high...most times payments are made weekly...as Juanita said they are generally salvaged or auction cars, and folks that cannot get financed other places can get financed at these lots...''they finance EVERYONE''..(right into the poor house ) _________________ Have you been helped by a poster? Do you want to show your appreciation? YOU CAN !! Just simply click on the donate button and send them some coin!
Gap insurance would always cover for the new cars which have good finance-support & not for cars that deemed total losses.
When would you think that GAP kicks in then if not when a vehicle is deemed a total? That is precisely what it's intent is... _________________ Have you been helped by a poster? Do you want to show your appreciation? YOU CAN !! Just simply click on the donate button and send them some coin!
When would you think that GAP kicks in then if not when a vehicle is deemed a total?
Opsss..I only meant that it signs up for new cars to cover them under circumstances when they're deemed total & does not sign cars which are already reused. Hope now its the right verbiage dear..
ArindamSenIndies
That is precisely what it's intent is...
