Three Reasons You Need GAP Insurance

Let’s start off with what GAP insurance is – Guaranteed Auto Protection, or GAP, insurance is literally the gap between what your insurance company will pay you if your vehicle is considered a total loss and what you still owe on your vehicle.  Here are three reasons why you need GAP insurance on your next auto loan:

1. Do you know how fast vehicles depreciate?  The accepted average car depreciation is 15% PER YEAR!* GAP insurance will protect you if something happens to your vehicle and it has depreciated lower than what you owe on your loan.

1. Still on the topic of deprecation, if your vehicle is stolen or totaled, most insurance companies will only pay on the wholesale value.  This means that there is a great possibility that there is a significant deficiency on what you still owe.  GAP insurance will cover that difference.

1. Not only does GAP cover the difference between what the insurance company gives you and what you owe, but GAP Insurance will also give you an extra $1,000 toward the purchase of a replacement vehicle.  It also gives you up to $500 on the deductible for any type of claim that is not a total loss.  If you do encounter the very unfortunate situation of theft or total loss, you can still come out in the driver’s seat.

GAP insurance, as well as other vehicle loan protection plans like Safety Net and Mechanical Breakdown Protection, can be added on to your vehicle loan in a matter of seconds at your local credit union when you take out your loan.  You can find more details on GAP, Safety Net, and Mechanical Breakdown Protection on Honor's website.

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Listen to 97.5 Y-Country's Wild Bill and Honor's Scott talk about GAP Insurance on this week's Mason Jar Monday!

*Source: http://www.carsdirect.com/auto-loans/what-is-the-average-car-depreciation-rate