Reader Question Austin, can you explain GAP car insurance for me and why I should or should not carry it?
Hey there Larry
First off, I am NOT an insurance agent, but I will tell you what I do know about GAP. GAP Insurance is a vehicle protection plan that fills the financial gap often left when motor insurance pay-outs are lower than expected.
Gap insurance is valuable because cars depreciate rapidly, meanwhile, in an effort to sell more cars, finance companies are making longer and longer loans, some for periods up to seven years. While the car is losing value rapidly, the amount you owe has barely changed.
GAP Insurance is not a replacement for your motor insurance policy, but a valuable supplement that protects you against serious financial loss if your car is stolen or written off.