How does someone know if specialized automotive protection is right for them? Often times, we overlook extra insurance and protections thinking nothing unexpected will happen to us, and we take a gamble and pass on insurance protection plans to save a few hundred dollars.
When purchasing a new car, which can often times be the second largest purchase of your life, auto insurance can go a long way to make sure you don’t end up paying thousands more should something unforeseen happen to your car. When you finance or lease a vehicle, Guaranteed Auto Protection or “GAP” insurance is a particularly useful type of insurance.
You may assume that any damage to your vehicle will be completely covered under your physical damage auto insurance (the kind you have to buy on your own), however, when your vehicle is declared a total loss (totaled), the primary auto insurance settlement is generally based on the market value of the vehicle, which is often times less than the balance that you still owe. The difference in this price is called the "deficiency balance", or "gap", and is where GAP insurance comes into play.
Lets do a little math exercise to fully understand what GAP insurance covers.
Lets say your finance or lease contract balance is $20,000.
You get into a pretty bad car accident where your insurance company deems your car "totaled" beyond repair, but will only pay out $15,000, because that is what they have established as the "market value" of your vehicle.
The "Deficiency Balance" (which is the difference between your vehicle balance and your insurance payout) is $5,000, and is money that you would have to pay back the bank out of pocket.
If you had GAP insurance, however, it will completely cover that $5,000 difference and will even cover up to $1,000 of your deductible!
How can I purchase GAP insurance?
The only time you can purchase GAP insurance is at the time you finance or lease an eligible vehicle, so you can't purchase it many months after buying your car. But, on the plus side, your GAP insurance payments can be factored in to your monthly finance or lease payments instead of all up front.
At Wellesley Toyota, located just outside of Boston, MA, we make purchasing GAP insurance (as well as other types of auto warranties and protections) extremely easy, with our fixed menu pricing. Factored into your finance or lease payments, purchasing GAP insurance would only add $12/month!
So why should I get GAP insurance?
Overall, the number one reason to get GAP insurance is for peace of mind. The simple fact of knowing you won't have to pay thousands more should you be in a serious accident is a great relief, especially if your budget does not allow for a financial setback. Getting in an accident is bad enough, but finding out you have to pay an extra few thousand dollars that isn't covered by insurance is even worse. GAP insurance protects you from that!
GAP insurance is only offered on new Toyotas at Toyota dealerships through Toyota Financial Services. If you would like to learn more, visit WellesleyToyota.com, stop by Wellesley Toyota on Route 9 in Wellesley, MA, or give us a call at 888-577-6342.