A good auto insurance policy may not be enough if you are insuring a new car that you bought with an auto loan; there is a gap between the actual insurance coverage and the remaining loan amount you need to repay should your car gets stolen or totally damaged. To cover the gap, you need an additional GAP insurance.
Of course, GAP insurance’s basic function is to make sure you stay protected at all times. In the event of a loss, the auto insurance will pay for the replacement costs based on the car’s actual cash value while the GAP insurance covers the difference between the insurance payout and the remaining balance of your auto loan.
Finding GAP insurance quotes is also very easy to do, especially with numerous specialized online tools now available online. When you compare GAP insurance quotes, you can easily spot added benefits and bonuses offered by different insurance companies.
A good GAP insurance policy is also suitable even when the car is purchased in cash. The GAP insurance can help cover the differences in actual cash value due to high depreciation rate and other external factors; you will be able to purchase the same car with both coverage in force.