Do You Need Gap Insurance if You Buy One of Our Used Cars?
Gap insurance is an optional coverage that helps pay off your car loan in the event that the vehicle is totaled or stolen, and you owe more than the car’s appraised value. If you’re interested in one of our used cars, gap insurance is something to consider.
When Would You Need Gap Insurance?
Gap insurance (“gap” stands for “guaranteed asset protection”) would be needed if your used or Chevy CPO car is stolen or totaled (i.e., declared a total loss) and you’re underwater on your car loan – meaning, you owe more than the car is worth. In this case, the car’s worth would be determined by the insurance company.
How does Gap Insurance Work?
Say you buy a used car for $10,000 at LaFontaine Chevrolet Dexter. A year later, the car is totaled in a collision. The car is valued at $6,000, but you still owe $7,000 on your loan.
Your collision insurance coverage will only cover the totaled car’s value of $6,000. If you have gap insurance, your insurer will help pay the other $1,000. Without gap insurance, you will have to pay $1,000 out of your own pocket.
Is Gap Insurance Worth it?
When you buy a used car from our Chevy dealers, this question will inevitably arise. Gap insurance is worth it if you:
- Make a down payment that’s less than 20 percent of the car’s price
- Want to finance the car over a period of 60 months or longer
- Lease the vehicle. Keep in mind though that many lease contracts include gap insurance, so check with us if this is an option you want to pursue.
- Purchase a used vehicle that depreciates faster than the average – for example, a sports car
Contact Us for More Information About Gap Insurance
Our Chevy finance experts will explain gap insurance further and help you decide whether it’s the right choice for you. Start by getting preapproved for financing and checking out our used car inventory. After you’ve selected a couple of top models, visit our showroom for more information and a test drive.