GAP Insurance Coverage on Your New Honda from Serra Honda Grandville
GAP insurance may seem like an unnecessary expense, until you really need it. There is a time period when you buy a new vehicle and drive it off the lot where the value of the vehicle depreciates quickly, but the insurance is designed to cover the current cash value of the car not the loan amount. What does this mean for owners? In the early stages of owning a vehicle the amount you have financed may not be the actual cash value of the vehicle right after it is driven off the lot due to the immediate depreciation. This means if an accident were to occur there is a difference in what is covered by insurance and what is still owed on the vehicle, which is where GAP insurance comes in.
What is GAP Insurance and How Does It Work?
GAP insurance, which is short for Guaranteed Asset Protection, covers the difference in the amount owed on a vehicle in the early stages of a loan and the actual value of the vehicle. So, if an accident were to happen when there is more owed on the car than what it is now currently worth you won’t have to pay out-of-pocket as GAP insurance will cover this.
GAP Insurance safeguards you so that your auto loan gets paid. In some cases, it may even pay your regular insurance deductible. GAP Insurance usually comes with a fairly small premium, and our team at Serra Honda Grandville (formerly RiverTown Honda) can provide you with all the information you need to decide if this form of insurance is right for you. Contact us to find out more about GAP insurance at (877) 236-9113.