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How Much is Gap Insurance?

Insurance Agent Examining Car After Accident

 

When you’re buying a certified pre-owned or used vehicle in Defiance, you’ll come across various insurance choices. One term you might hear is “gap insurance.” But how much is gap insurance, and what does it cover? In this guide, Exceptional Motorcar’s finance team will explore gap insurance, explaining its basics, what it covers, why you might need it, how to get it, and the average cost of gap insurance.

 

 

What is Gap Insurance?

Before we dive into how much is gap insurance, let’s clarify what gap insurance is and its significance. Gap insurance bridges the gap between your vehicle’s current value and your remaining loan balance. It differs from comprehensive insurance, which primarily covers non-accident-related damages. Gap insurance, also called Guaranteed Asset Protection (GAP) insurance, safeguards your financial interests in the event of an unexpected total loss by closing the financial disparity between your car’s financed amount and its actual cash value (ACV).

However, it’s important to remember that gap insurance doesn’t protect against bodily injuries or property damage like liability Insurance. It primarily comes into play when there’s a total loss.

Average Cost of Gap Insurance

The average cost of gap insurance can vary depending on where you purchase it in Lima. Here’s an overview of your options:

  • Purchase from your current auto insurer: When you buy gap insurance from your regular auto insurer, the cost is typically around $20 per year. This is the same insurer that provides your comprehensive and collision insurance.
  • Add gap insurance to your car loan: Many lenders offer the option to include gap insurance in your car loan. Opting for this choice usually means paying a single flat fee for coverage, ranging from approximately $500 to $700.
  • Purchase standalone gap insurance: Depending on your insurer, you may be unable to include gap insurance as part of your overall insurance package. Instead, you might have the option to purchase it separately. In this scenario, the average gap insurance cost is a one-time fee ranging from $200 to $300.

Is the Gap Insurance Price Worth It?

The yearly gap insurance costs are relatively low, making it easy to fit into your budget. Whether you opt for a $20 annual payment or a single flat fee, you can drive through Toledo with peace of mind. Here are a few compelling reasons why adding this extra coverage is a smart choice, whether you have a new or used car:

  • Coverage in Total Loss Situations: Gap insurance steps in if your vehicle is stolen or damaged in an accident and declared a “total loss.” It shields you from unexpected financial burdens.
  • Protection for Loan Discrepancies: In the event of an accident in Findlay where you owe more on your auto loan than your car’s current value, gap insurance ensures you’re fully protected, preventing you from being left with a financial gap to fill.

Explore More Car-Buying Tips from Exceptional Motorcar!

Now that you understand gap insurance costs, discover other ways to protect your vehicle affordably with Exceptional Motorcar! Have questions about gap insurance prices? Contact us for assistance. Explore our other car-buying tips for advice on buying vs. leasing, trading in a financed car, and more.

 

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