Benefits of GAP Insurance | Harlingen, TX
When you buy a new Genesis car or SUV from Genesis of Harlingen, your thoughts are probably on which street you’re going to conquer first. But something else you need to have ready to go is an updated insurance policy. While Texas has some required levels of insurance you’ll need to demonstrate before you can drive your Genesis off the lot, there are some optional coverages to consider as well, chief among them being GAP insurance.
What is GAP insurance?
GAP, which stands for Guaranteed Asset Protection, is an additional insurance that is useful if you have financed a vehicle and are paying on a loan or if you have leased a vehicle. In fact, many lenders require you to carry GAP insurance until your loan is paid off.
That’s because collision and comprehensive insurance will only cover a vehicle’s current value if you total it out. Due to depreciation, though, it’s possible you may still owe more on your loan for the original vehicle price than what insurance pays out if your vehicle is totaled. For example, if you take out a loan for $30,000, get in an accident a year later when the car is deemed to be worth $20,000, but still owe $25,000 on the loan, collision and comprehensive will only pay you $20,000. This leaves you on the hook for the remaining $5,000.
That’s where GAP insurance comes in.
What does GAP insurance cover?
GAP insurance only comes in to play when insurance totals out your vehicle. In that event, GAP insurance will pay out the remainder of your loan, no matter the reason for your vehicle’s being totaled out — a collision, theft, vandalism, or natural disaster, like a fire, flood, or tornado.
Please note: GAP insurance does not reimburse you for your down payment. You are out that money if your vehicle is totaled.
Learn more about financing a new Genesis model at Genesis of Harlingen in Harlingen, Texas.
