A new vehicle depreciates, or loses value, as soon as it\u2019s\ndriven off the dealer\u2019s lot. A driver\u2019s loan balance typically goes down at a\nmuch slower pace than the car\u2019s value. That means that in the first years after\na new car is purchased, the amount owed on the loan may be significantly higher\nthan the vehicle\u2019s value.<\/p>\n\n\n\n
When you owe more on your car than it\u2019s worth, you are\nconsidered \u201cunderwater.\u201d If you\u2019re in that situation and your car is totaled in\nan accident, the insurance company\u2019s payment will be less than the amount owed\non the loan. You will have to cover the difference. That\u2019s where Guaranteed\nAsset Protection (GAP) insurance comes in. <\/p>\n\n\n\n
A car is \u201ctotaled\u201d if the cost to fix it is greater than\nits value. State laws and insurance company guidelines vary on the issue of\nwhen a vehicle is considered totaled.<\/p>\n\n\n\n
Collision or comprehensive coverage will apply if your car\nis totaled, but the amount you get from an insurance company will be the car\u2019s\nvalue at that time. GAP insurance will provide enough money to cover the\ndifference between the insurance payout and the balance due on the loan so you\nwon\u2019t have to pay for a car that you can no longer use.<\/p>\n\n\n\n
If your vehicle is totaled, the money that you receive from GAP insurance will have to be used to pay off the loan on the totaled vehicle. You won\u2019t be able to use it to make a down payment on a new car. <\/p>\n\n\n\n
To buy GAP insurance, you will generally have to be the\nvehicle\u2019s original loan borrower or lessee. If you lease a vehicle, your\ncontract may include GAP insurance coverage.<\/p>\n\n\n\n
Car dealerships offer GAP insurance, but you don\u2019t have to purchase\ncoverage from a dealer. You may be able to buy a policy at a lower rate if you contact\nan insurance company directly. A carrier may only offer GAP insurance if your\nvehicle is no more than a few years old.<\/p>\n\n\n\n
No one wants to think about having a new car get totaled,\nbut it can happen. If you find yourself in that situation and you owe more than\nyour vehicle is worth, you will still have to pay off the loan. GAP\ninsurance<\/a> can offer you protection so you won\u2019t have to figure out\nhow to come up with thousands of dollars to pay off a loan on a vehicle you\ncan\u2019t drive, plus make a down payment on another car.<\/p>\n\n\n\n Petruzelo Insurance helps vehicle owners across CT find the\ncoverage they need at affordable rates. We can get quotes from several top\ninsurers so you can compare a range of options. Working with us can spare you\nthe time and hassle of filling out multiple forms or speaking with\nrepresentatives from several companies. Contact us<\/a> today to\nget started.<\/p>\n","protected":false},"excerpt":{"rendered":" A new vehicle depreciates, or loses value, as soon as it\u2019s driven off the dealer\u2019s lot. A driver\u2019s loan balance typically goes down at a much slower pace than the car\u2019s value. That means that in the first years after a new car is purchased, the amount owed on the loan may be significantly higher […]<\/p>\n","protected":false},"author":1,"featured_media":2936,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-2935","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-automotive"],"_links":{"self":[{"href":"https:\/\/www.petruzelo.com\/blog\/wp-json\/wp\/v2\/posts\/2935","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.petruzelo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.petruzelo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.petruzelo.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.petruzelo.com\/blog\/wp-json\/wp\/v2\/comments?post=2935"}],"version-history":[{"count":1,"href":"https:\/\/www.petruzelo.com\/blog\/wp-json\/wp\/v2\/posts\/2935\/revisions"}],"predecessor-version":[{"id":2937,"href":"https:\/\/www.petruzelo.com\/blog\/wp-json\/wp\/v2\/posts\/2935\/revisions\/2937"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.petruzelo.com\/blog\/wp-json\/wp\/v2\/media\/2936"}],"wp:attachment":[{"href":"https:\/\/www.petruzelo.com\/blog\/wp-json\/wp\/v2\/media?parent=2935"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.petruzelo.com\/blog\/wp-json\/wp\/v2\/categories?post=2935"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.petruzelo.com\/blog\/wp-json\/wp\/v2\/tags?post=2935"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}