Your Gap Insurance Options

There are only three scenarios that apply to folks planning to purchase Gap Coverage.

One, you’re planning on purchasing a new or used vehicle and are thinking about purchasing gap insurance.

Two, you’ve purchased a new or used vehicle within the last 12 months and car considering purchasing gap insurance.

And three, everyone else (if this is you, there are a couple of options).

Scenario 1 - If you're getting ready to purchase a new or used vehicle, there are 4 ways to avoid having a large gap in your insurance coverage should anything ever happen to your vehicle.

1. Put at least 20% - 30% down on any purchase;
2. Purchase GAP Insurance coverage from your Bank or Finance Company;
3. Purchase Gap Insurance from an Insurance Company;
4. Purchase Gap Insurance from an Automobile Dealership you're purchasing at.

Let's take a look at each.

Putting 20% - 30% down is probably the smartest way to take care of it - you automatically wipe-out the typical 30% 1st yeardepreciation.  But with the average price of a new car at almost $26,000, coming-up with a $7,800 down-payment can be tough for a lot of people.

Purchasing a "Rider" or GAP from an Insurance Company or Bank is probably the next best option.

GAP has been around for years - particularly with Leased vehicles.  But with the huge depreciation on vehicles today, it's becoming more popular with regular bank financing as well.  Yet, it's not offered by many insurance companies or banks - and that's ridiculous since GAP would protect their customers from possible financial ruin.

If your Bank offers it, have them explain it in detail.  For instance, some gap coverages even pay your insurance deductible if your vehicle is totaled or stolen.  Also, ask if the coverage provides any money toward a replacement vehicle.

Be careful here....many Banks will only provide GAP if you agree to finance the vehicle with them as well.  Sometimes that might work for you - some times is wont.

Getting Gap Insurance from an Insurance Company is also a good choice, although finding a company that offers it can be a chore.  I've only been able to find three Insurance Companies that let you purchase Gap Insurance.

One is Progressive Insurance - we've all heard of them, right?  They offer Gap as an add-on to their regular policies, so in order to get it, you have to get car insurance with them.  But...their car insurance coverage will usually save you money and their Gap coverage is very, very cheap.

The second company is All State Insurance -  and they have the same policy as Progressive - you have to get their car insurance.  Personally, I've found All State to be little expensive when it comes to car insurance.

One company that I’ve used twice in the past is Lee & Mason Financial Services, Inc..  They offer a stand-alone policy with no strings attached and it's a one time investment only.

They’ve been around for years, are owned and backed by a large Insurance Company, and is the only non-car insurance company I ever recommend.

And finally, many Dealerships offer Gap coverage as part of the Sale process.  They'll push you very hard to purchase what they sell....and like many, we find that annoying.

Besides, it's expensive - I've seen Dealers sell a Gap Insurance policy for as much as $500 - $600.  And then they want you to add it to your loan which effectively makes it double the cost with the interest rate of the loan tacked on.

Scenario 2 - If you’ve purchased a vehicle within the last 12 months, you have a two options.  One, Two, check with your lender or insurance company to see if gap is available.  If it is, jump on it.

And two, check out the offers that Lee & Mason Financial Services, Inc. has.

Scenario 3 - If neither of the scenarios I’ve just discussed apply to you….you could have problems.  Really, the only option you have is:

Call your current Insurance Company and see if they can help - And call the Bank that has your Loan or Lease and see if they can help.

Go ahead and pick-up the phone today and call your agent or insurance company.  Ask them what they pay if your vehicle is considered a total loss.

With your current policy, will they pay the entire amount owed to the bank if your vehicle is wrecked and considered a "total loss"?

If they do not, what policy changes can be made to cover it all.  If you get lucky and they'll make a change, ask what it covers - exactly - and what does it cost.

Ask the Bank that has your lease or loan if they offer Gap Insurance and can it be added to the Loan.  If they can, good for you.  Take good notes and find out what it covers and what it costs.

After you've gathered your information, and you have an option, I’d recommend you purchase the coverage.

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I do have an obligation to point out that not all Car Makers, Dealers, Salespeople, Insurance Companies and Banks are greedy or crooked.  This site is dedicated to honest Companies and their Professional Employees who've grown weary of the ignorant and classless giving the automotive related industry a black eye......a black eye that I feel is very close to being permanent.

By using these new and used car guides, I hope to be able to help you find the Best Businesses, and the Professionals that represent them, with very little effort on your part and help you....

Save More Money and More Time Than You Ever Have Before.

It is also my hope that these Companies and the Professionals that represent them will have more business than they can handle - a reward they justly deserve.

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Tom O'Leary  - "A Concerned Dad....and Automotive Analyst"

New Car Purchase - Exceptional New Car Purchase Advice and Automobile Purchase Strategies for your next new car or used automobile purchase.

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