You’ve got a new vehicle in mind, and you’re excited to sign on the dotted line and drive it off the lot. One thing to keep in mind before you do, though, is whether you’ll be protected should you suffer a theft or total vehicle loss. As Investopedia.com explains, while your auto insurance may cover the cash value of your vehicle prior to the damage or loss, it does not necessarily cover the total outstanding balance of your lease or finance contract, leaving you with a “gap” in your coverage that can potentially translate into a hefty bill.
What is GAP Coverage?
Guaranteed Asset Protection, or GAP coverage, protects a buyer or lessee in the case of total loss. Simply put, it helps bridge the gap between how much is owed for the vehicle and how much the car is worth if it is totaled or stolen. GAP coverage is included with all Ally leases, but not all finance companies include GAP. If you’re purchasing a vehicle, you can typically include GAP coverage at the time you sign the lease or finance contract papers.
Do I Need a GAP Contract?
Accidents happen, and it’s important to consider that if you have a total loss of your vehicle, your primary insurer’s settlement payment amount may not cover the amount you owe. If you are concerned about possibly not having enough money on your own to pay that “gap” amount to the lender, you should consider the purchase of GAP.
Where Do I Get GAP Coverage?
When it comes to purchasing your GAP Coverage, you have several different options.. According to DMV.org, GAP coverage is available from a variety of providers. GAP is typically offered by a dealership during the vehicle purchase process. You also may be able to get GAP through your auto insurance company, the lender that’s financing your vehicle, or an independent GAP provider.
Still not sure if GAP coverage is right for you? Learn more about Ally’s GAP coverage here. Also, your local dealer is always available to answer any questions you may have. And don’t forget to head on over to Ally Wallet Wise for tips on this and other great auto topics.