Is GAP Insurance Worth It?

When you buy a new vehicle, you want to make sure you protect your investment. That’s why it’s important to learn about gap insurance and if it’s worth getting for your vehicle. Our financing team believes it is a smart investment for drivers getting behind the wheel of a new vehicle, but in the end, the choice is yours. Check out our guide on gap insurance to see if this coverage is something you’d like to add to your vehicle purchase.

What is Gap Insurance?

So what is gap insurance on a car exactly? Gap insurance covers the gap between the real cash value of your vehicle and the amount that you still owe on your financing or leasing plan. The “gap” in gap insurance actually stands for “Guaranteed Asset Protection.” In the event you’re in an accident, insurance will determine how much to pay based on the real value of the vehicle. If you still owe more on the loan than the vehicle is currently worth, the remainder of the cost comes out of your pocket. Gap insurance will ensure you’re covered.

Do I Need Gap Insurance?

While it may seem like it’s unnecessary to have if you’re a safe driver, anything can happen. We believe gap insurance is worth it. Here’s why:

• Depreciation occurs as soon as you drive off the lot, and depreciation can be especially steep with new luxury vehicles.
• You never know when an accident will occur. If one happens at the wrong time, you might have to make more than one car payment to clear your debt.
• What is gap protection going to do in the event of theft or vandalism? Here, it complements your comprehensive coverage, allowing you to get the money you need.

If you’re still not convinced, get in touch with our finance team. Though the cost of gap insurance will vary depending on the vehicle and where you get it from, some insurers offer it for as little as $20 a year. For this price, it’s definitely worth the coverage.

Learn More Finance & Insurance Tips at North Penn Mazda

No matter if you’re looking to learn about more car-buying tips and tricks, or you’re interested in this coverage, contact our finance team to get the process started when you buy a new vehicle. In the meantime, contact us with any questions, learn if you need full coverage on a used car, and more.