Deal Pack Blog

What is GAP insurance and do I need it?

posted on: December-04-2014
by: Amir Dabiri
category: Tips

Anyone who has purchased a car at a dealership or through a bank has been asked this question: “Would you like to add GAP coverage to your car?”  Most of the time the only thing we are thinking is “this guy just wants to sell me something so he can make commission off of it.” But I can tell you this much, I will never fall for NOT getting it again. A few years back, I purchased a Jeep Cherokee and of course when they asked me to add GAP (Guaranteed Asset Protection), for an extra few bucks a month, and I said nope I’m good. Well, little did I know a few years later, and BAM I was hit and my car was totaled. I still owed the bank over $10K; however, since the car was only worth $7K book value that is all the insurance company paid. So what does that mean? Well I was still liable for the remaining three thousand dollars… That’s right I was still responsible to pay that amount even though I no longer had the car. The lady at the bank told me “you should have gotten GAP insurance”. This was by far the stupidest decision I ever made when I said no. Since then I’ve gotten GAP on all the vehicles I’ve purchased. Believe it or not, it’s no more than like $495 TOPS and break that apart on your monthly loan so it’s about $10 a month extra. So the next time you are at the dealership or finalizing your loan, make sure you tell them that you want GAP insurance. You may be the best driver, but accidents can happen anytime whether it’s your fault or not. Don’t get stuck with making auto payments on a car that you no longer even have.

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