What is Gap Insurance?

When sorting out the details of financing and insuring your new Basil Chevrolet Inc. vehicle, one important option to think about is gap insurance. Gap insurance acts like a financial bridge, filling the gap between what you owe on your car and its actual value if there’s an accident. But what does Gap insurance cover? This article explores what gap insurance involves, what it covers, and whether it’s a smart decision for your drives in the Jamestown area.

What Does Gap Insurance Do?

So, what does Gap Insurance do? Gap insurance, or Guaranteed Asset Protection (GAP) insurance, acts as a financial bridge between your vehicle’s current value and the remaining loan balance. Unlike comprehensive insurance– which covers non-accident-related damages, gap insurance protects against unexpected total losses by closing the financial gap between your car’s financed amount and its actual cash value (ACV). 

However, it’s essential to remember that gap insurance doesn’t protect against bodily injuries or property damage like liability insurance; its primary role comes into play when there’s a total loss.

What Does Gap Insurance Cover?

Gap insurance covers various car-related troubles, but it’s crucial to note that it primarily deals with vehicle damage rather than property or bodily injuries. Let’s break down what gap insurance includes and excludes:

What Does Gap Insurance Cover?

• Theft
• Fire
• Vandalism
• Accidents
• Acts of nature (e.g., tornadoes, hurricanes, floods)

What Does Gap Insurance NOT Cover?

• Deductibles (with exceptions in some policies)
• Engine failures and mechanical malfunctions
• Death
• Extended warranties

Average Cost of Gap Insurance 

The cost of gap insurance in Westfield or Dunkirk can vary based on where you make the purchase. Here’s a breakdown of your options:

• Purchase from your current auto insurer: If you choose to buy gap insurance from your existing auto insurer, the cost typically hovers around $20 per year. This is the insurer providing your comprehensive and collision insurance.
• Add gap insurance to your car loan: Many lenders offer the convenient option of including gap insurance in your car loan. Opting for this route usually involves a one-time flat fee ranging from approximately $500 to $700.
• Purchase standalone gap insurance: Depending on your insurer, you may not have the option to include gap insurance as part of your overall insurance package. In such cases, you can buy it separately for an average one-time fee ranging from $200 to $300.

Do I Need Gap Insurance?

While not mandatory, choosing gap insurance is strongly recommended when dealing with insurance plans and financing for your new vehicle. It’s especially useful if your dealership’s plan covers deductibles, providing peace of mind and potential savings in case of accidents. Talk to our financing team to understand the benefits of adding gap insurance to your coverage.

Discover Your Insurance and Finance Options at Basil Chevrolet Inc.

For well-informed vehicle purchases, it’s crucial to undertand various insurance plans. Understanding your needs in advance ensures you get the right coverage, potentially saving time and money down the road. Visit us in Fredonia today or reach out online to discuss any questions and explore the complete range of insurance and financing choices.