When a person decides to buy an automobile, one of the additional expenses that one expects is the cost of insurance. But there are many prospective clients who are easily lost in the fine print details of insurance. Our team at Baierl Automotive can guide you through this tedious process with our years of expertise in the vehicle market. One of the optional coverage that should attract your attention is the GAP Insurance, an abbreviation that means Guaranteed Auto Protection or Totaled Insurance. Depending on your preferences, vehicle usage and means, this optional insurance coverage may prove to be helpful for you.
What does the Gap Insurance actually provide those who subscribe to it? How will it benefit us? Baierl Automotive gives a lowdown of its features.
What is GAP Insurance?
GAP Insurance is a type of coverage that will shield a buyer from a potential debt that one may incur when the car gets totaled. As a rule of thumb, a car will depreciate in value the moment you purchased it. No one will buy a car from you for the exact amount that you purchased it with. By then, if the vehicle was under a financing scheme (possibly through an auto loan, bank loan or in-house financing), the GAP insurance will answer for the current value of the car and not the amount you owe the financing firm. This is a contingency plan to avoid a situation where you'll have more debt than what you originally had. The GAP insurance will then come in and pay the remaining amount so that you don't have to shell out money any further.
Assessing the Necessity of a GAP Insurance
But is the GAP insurance really necessary?
Not all pre-owned vehicles need to be covered by this type of insurance. The only sure situation where there might be a need for this is when you will be purchasing the car under a financing scheme. If you will pay the full amount in cash, there will be no actual need for this. But if you are under a long-term financial commitment, think about this. What will happen to you in the event that your car gets written off or stolen? You will still have to pay your financer the amount you still owe them? The GAP insurance will help soften that blow. It will use the current market value of your car and match it with your existing debt.
Without the GAP insurance, the potential consequence to you would be negative equity. You will owe a debt that is more that the amount that you really owe. This is a reality that you may face if you bought a vehicle that quickly loses its value through the years. This may also happen if you only made a small down payment and the structure of your financial scheme focuses on a balloon payment. This is a big lump sum at the end of the deal that a financer anticipates to make.
Other circumstances that may thrust you into this situation would be when you are paying a high interest rate or if you are paying it over a longer period of time. But how will you know if a GAP insurance is not suitable for you? If you are the first registered owner of the vehicle and it has only been with you for a year, you may just be in luck. Many comprehensive car insurance policies provide a new car replacement feature if the car has only been with you for less than 12 months of old. If your financial agreement has also stipulated that it will cover for the book price (actual and official value of the car) and the amount you will pay, a GAP insurance will also appear redundant.
Reading the Fine Print
As with any complicated agreements, you must be thorough in reading what you will be signing. There are certain situations that may not be covered by the GAP insurance. If you have been negligent of your financial obligations, the main car insurance company may deduct penalties from you. The GAP insurance will not cover this. There may also be a cap amount for the insurance. If you go beyond this amount, the insurance may not be applicable already. Other non-standard items that you may have added in your vehicle may not be covered by this insurance as well. It will not also settle other insurance premiums and warranty charges.
Baierl Automotive will be happy to assist you as you tackle more questions in the buy and sell market for vehicles. It has been our commitment to provide factual guidance and strategic counseling for prospective buyers and sellers of vehicles.
Baierl Automotive prides itself in offering all of the following brands: Acura, Audi, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, Fiat, Ford, GMC, Honda, Hyundai, Infiniti, Jeep, Kia, Lincoln, Land Rover, Lexus, MINI, Mazda, Mercedes Benz, Mercury, Mitsubishi, Nissan, Pontiac, Porsche, Saab, Saturn, Scion, Subaru, Suzuki, Toyota, and Volkswagen.
Baierl Automotive is located in Wexford, Pennsylvania. Serving North Hills, Franklin Park, Sewickley, Coraopolis, Cranberry, Mars, Zelienople, Butler and all of Greater Pittsburgh, PA. Driven to be better! Phone number is
This entry was posted in Baierl Automotive and tagged Baierl Automotive, baierl financing, car loans, GAP Insurance, Pittsburgh, Pittsburgh baierl financing, Pittsburgh car loans, Pittsburgh gap insurance, Pittsburgh pre-owned vehicles, pre-owned vehicles on 02/13/2015 at 7:56 PM