For all the advantages of purchasing MileOne used cars, we know they come with questions, too. One of the most common: Do you need GAP insurance for a used car? MileOne Autogroup is here to explain the ins and outs of GAP insurance, and why it’s often a good idea to have it.
What is GAP Insurance?
GAP insurance stands for Guaranteed Asset Protection insurance. It’s a type of add-on coverage that bridges the gap between the vehicle’s value and what you still owe on the lease or loan, protecting you in the event of vehicle total loss or theft.
GAP insurance protects drivers from having to make payments on a vehicle they are no longer able to drive. Most of the time, GAP insurance is required when leasing a vehicle to help protect the lender, and it is recommended for drivers who put down less than 20% of the vehicle’s value on the day of purchase or vehicles with term lengths longer than 60 months.
How GAP Insurance Helps Used Car Owners
Pre-owned vehicles are typically much less costly than new models, which means you will likely be able to put more down on the day of signing. While you owe less, it’s vital to remember one thing: collision coverage typically only covers the car’s book value, leaving a gap between what the insurance company decides it’s worth and its replacement value, which is often a significant difference. GAP insurance is especially important if your used vehicle has negative equity, a long loan term, a lower down payment, or if you want to preserve your savings in a worst-case scenario.
Test-Drive Pre-Owned Vehicles at Your Nearby MileOne Autogroup Dealership
Whether you’re interested in purchasing a new or pre-owned vehicle, the dealerships of MileOne Autogroup have the resources and tips to make every step in the process – from purchase to ownership to trade-in – much simpler. Speak to a dealer today to find the perfect vehicle and the resources to make your experience a great one.