Did you know that a new car can be worth 30% less in 3 months than the day it was purchased? Car owners often assume that if their car is totaled then it will be replaced with the amount they paid for it, or at least the amount they owe on their auto loan or lease. Unfortunately, this is not true – but for some auto owners, there might be a solution. It’s called GAP Insurance.
Guaranteed Asset Protection (GAP) Insurance offers valuable protection for your auto loan or lease by covering the difference (GAP) between the balance of what you owe on your car and the current market value. In most instances, GAP will also pay your regular insurance deductible.
Here’s an example of how it works! You recently purchased a new car for $21,000. Your down payment was $1,500 and your auto payments are $350 per month. Six months later, you are in an accident and you total your vehicle. Your insurance company pays you the current market price (actual cash value) of your car, which they deem as only $15,000. With your down payment and your six monthly auto payments, you still owe $17,400 on your car. The value your insurance company is giving you is lower than the amount you still owe on your loan or lease payoff. The difference, or gap, between the two is $2,400. With Guaranteed Asset Protection, you receive help with this financial gap. Without the insurance, the $2,400 comes out of your pocket.
If you find yourself in a situation where you owe more on your vehicle than what it is worth, made a low down-payment, have a high interest rate on your loan or lease, or rolled over other costs into your car payment then you should consider GAP Insurance. It’s a great resource!
At DoverPhila, we offer this valuable protection at a very inexpensive cost and if you are not satisfied then we will return your premium if you cancel within 60 days. Also, as an added benefit of purchasing GAP through DoverPhila, you are provided with the Auto Advantage Program that includes an Auto Deductible Reimbursement (ADR) benefit for up to five (5) years. ADR provides members with reimbursement of their primary auto insurance deductible (up to $500) per loss (limit of two losses per year) when a claim is filed and paid by the auto insurance company for a covered vehicle titled to the primary borrower. Along with ADR, members also receive Personal ID Restoration Consulting and Warranty Registration Service.
For more information on our Guaranteed Asset Protection Insurance and its benefits, contact our loan department by calling 330-364-8874.