Is it a good idea for drivers to buy GAP insurance?
Guaranteed Asset Protection  or GAP insurance  is offered by nearly all auto insurance companies in the U.S. It is a type of optional supplemental coverage that covers the "gap" between the amount you owe on your vehicle and its actual depreciated value. It doesnt matter if you're leasing your vehicle, you have an auto loan, or a refinance. GAP insurance can help you save money  even thousands of dollars  on the off chance your car is totaled or stolen, and you still owe more than the car is worth. If your vehicle is stolen, GAP insurance pays the actual cash value (ACV) of the vehicle, minus your deductible. Its easy to get a free insurance quote in minutes through Credibles partners here. That depends. In some states, an auto dealership or lender must offer GAP insurance when you purchase a vehicle. However, in most states, it's an optional purchase. Vehicles depreciate, so the value of the vehicle at the time of sale wont be the same if you're in an accident and your vehicle is totaled. If you make the personal finance decision to buy collision coverage on your auto insurance, which is typically required if you have a car loan, it will only cover the cars value at the time of the accident, not what you paid for it. So, if the amount owed on your car loan is $13,500, but the car is now valued at only $9.300, you will still owe $4,200 even though your car is now scrapped metal. The $4,200 is what is covered if you opted for GAP insurance. Explore pricing and find the right auto insurance plan that fits your needs on Credible. HOW TO CHECK IF YOUR CAR INSURANCE PAYMENT IS TOO MUCH  Its worth noting that GAP insurance coverage is different from new car replacement coverage, which only available in the first year of car ownership. GAP insurance provides coverage for your vehicle for the length of the car loan or lease. Credibles partners can send you free car insurance quotes if they find you a better rate. All you need to do is get started is log on. No. Its just the opposite. You need collision and comprehensive insurance coverage to add GAP insurance to your policy. If you plan to drive on a public road, you must have your states minimum requirements for insurance at the very least. If you apply for a car loan, your bank, credit union, or other financial institution will likely require comprehensive and collision, along with liability insurance coverage. GAP insurance is supplemental coverage and optional in most cases. However, if you lease your vehicle, your lender may require you to purchase GAP insurance as part of the lease agreement. Compare auto insurance companies and shop their plans via Credible. The cost for GAP insurance varies from one insurer to the next. But overall, it is relatively inexpensive. One insurer may offer lease and loan coverage for as little as $5 per month. Another company may charge $20 per year, while still another charges .45 per day. Its probably safe to assume you will pay between $400 and $600, which covers the entire term of the loan. 3 TIPS FOR BUYING CAR INSURANCE ONLINE  Comparing quotes is important, but it can take time. With Credible's partners, you can eliminate the time-consuming part of your search. Maybe you didnt realize when you bought or leased your new car that if youre in an accident and your car is a total loss, your insurance company isn't obligated to pay off your loan or lease in full. Instead, your insurance carrier is only obligated to pay the market value of the vehicle, which can be far less than what you actually owe. To make sure you are not overpaying for car insurance, its free to check online through Credibles partners. You may want to consider GAP insurance if:  The term of your car loan is five years or longer. You are paying a high-interest rate, making it difficult to pay down the principal on your loan. You made a low down payment or no down payment. You bought a vehicle that depreciates quickly. Compared to what you may pay if your car is totaled in an accident, GAP insurance is very affordable and worth getting for financial protection. If you didnt add GAP coverage when you purchased or leased your new vehicle, your lender might let you add GAP coverage to your current insurance policy. Most major insurers offer GAP coverage, as do online insurers. TAKE THESE 5 STEPS NOW  Make sure you are not overpaying for car insurance. Its free to check online through Credibles partners.