What Is Chevrolet Gap Insurance?
When you own a vehicle, the state requires you to have auto insurance to protect it. This auto insurance protects you in the event of an accident, helping to pay for repair costs and any medical expenses. However, standard auto insurance doesn’t protect you in every situation. In the event of a serious accident, you may need something called Guaranteed Asset Protection (GAP) insurance to best protect you financially. Below, we explain GAP insurance, including the benefits of getting it, whether you’re legally required to have it, and how you can add this protection to your existing auto insurance protection. View our inventory of New Chevrolets, or If you have any questions, give us a call at 931-548-1370 today!
What Is Chevrolet GAP Insurance?
To understand GAP insurance, it’s helpful to first understand a few key aspects of your vehicle. The first is your vehicle’s value. Your vehicle’s value is essentially how much you would get for it if you sold it or traded it in. All vehicles depreciate over time as they accumulate wear and tear. Therefore, your vehicle is likely worth less now compared with when you bought it. This holds true even if you just drove the vehicle off the dealership lot yesterday. It’s important to know the value of your vehicle, especially how it relates to your auto insurance coverage.
At the same time, there’s something called equity. Equity is the difference between the value of the vehicle and the amount you have remaining on your loan. If your vehicle is worth more than the remaining loan amount, then you have positive equity. In contrast, if you owe more on your loan than the total value of the vehicle, you have negative equity. It’s called negative equity because if you were to sell your vehicle today, you would need to pay an additional sum to finish paying off the loan.
This is where GAP insurance can help. GAP insurance covers you in the event of an accident when you have negative equity. For example, let’s say you get into a car accident, and you total your car. Your insurance provider determines that the value of your vehicle was $8,000, while you still have $10,000 remaining on your auto loan. Someone then needs to pay the remaining $2,000 to finish paying off the loan. GAP insurance covers you in situations such as this, paying off the difference between your vehicle’s value and the remaining loan amount.
Benefits of Chevrolet GAP Insurance
The biggest benefit of GAP insurance is financial. Should you find yourself in a situation where you’ve totaled your car, you don’t want to deal with the expense of having to pay off your auto loan. Instead, you want your insurance to cover all the costs so you don’t have to pay anything out of pocket. With GAP insurance, you not only get financial protection but also peace of mind. Trying to determine how to pay for your next vehicle is enough of a consideration without having to think about how you’re going to pay your negative equity as well.
Do You Need Chevrolet GAP Insurance in Columbia, TN?
GAP insurance is not legally required in Columbia. GAP insurance is separate from auto insurance, so as long as you have auto insurance, you’re legally protected. However, many people find it beneficial to also add GAP insurance to their coverage. There’s a difference between needing GAP insurance because you’re legally required to have it and simply wanting the financial protection it provides.
If you currently owe more on your auto loan than the value of your vehicle, you should strongly consider getting GAP insurance. To learn the estimated value of your vehicle, you can use our trade-in evaluation tool. This tool asks a few basic questions about your vehicle, such as the make, model, year, and mileage, and then provides you with a value estimation. You can use this estimate, plus the remaining amount on your loan, to help decide whether GAP insurance is a good idea in your situation.
If you’re still unsure if GAP insurance is a good idea for you, please feel free to contact our finance center. One of our team members would be happy to discuss GAP insurance with you in more detail and provide recommendations based on your current situation. While GAP insurance offers great protection in many situations, not everyone needs it. Let our finance center help you decide what’s best for your vehicle.
How To Get Chevrolet GAP Insurance
There are two primary ways you can get GAP insurance. The first option is to get it through your local Chevrolet dealership. When you buy a car, you can purchase GAP insurance along with it. Talk to the finance department at a local dealership to learn what sort of GAP insurance policies it provides and how much they cost. You can then determine whether it makes sense to add this coverage to your next vehicle purchase.
Your other option is to get GAP insurance through an auto insurance provider. Some auto insurance agencies also offer GAP insurance. A good place to start is by talking to your current auto insurance provider to see whether you can add GAP coverage to your existing policy. After that, you may want to explore other auto insurance agencies to find out if they can offer you a better rate. Once you compare your options among the dealership and several auto insurance providers, you can determine which GAP insurance provider makes the most sense for your situation.
Learn More About GAP Insurance at Stan McNabb Chevrolet of Columbia
To learn more about GAP insurance or get GAP insurance for your vehicle in Columbia, contact Stan McNabb Chevrolet today. We offer excellent GAP insurance policies, helping to protect you financially should you get into an accident. Our team is always available to answer any questions you may have and help you select an insurance policy that’s right for you. Thank you for choosing Stan McNabb Chevrolet of Columbia, and we look forward to hearing from you.