Drivetime: Gap Insurance Options

DriveTime is the second-largest used car dealership in the US, with over 100 dealerships across the nation. The company offers guaranteed asset protection (GAP) insurance, which is an optional policy that covers the remaining balance on a financed vehicle after an insurance payout. This type of insurance is beneficial for customers as it ensures they are not burdened with paying off the remainder of a loan on a vehicle that is no longer driveable. DriveTime also provides a range of other services, including financing options for customers with bad credit or no credit history, and a reservation program that allows customers to hold a car for up to seven days.

DriveTime offers optional GAP insurance

DriveTime offers optional Guaranteed Asset Protection (GAP) insurance on all of its vehicles. This policy covers the remaining deficiency balance on a totalled vehicle after the insurance payout. This means that if a vehicle is deemed a "total loss" due to an accident, GAP insurance will cover the remaining amount on the loan that the customer owes. This can benefit the customer financially as they will not be stuck paying off the remainder of the loan on an undrivable vehicle.

GAP insurance is a useful option for those who want the added security of knowing that they will not be burdened with loan payments for a vehicle that they can no longer use. This type of insurance is especially relevant for those purchasing a used car, as these vehicles may be more likely to experience issues or require repairs. By offering GAP insurance, DriveTime provides customers with peace of mind and protection against financial loss in the event of a totalled vehicle.

The cost of GAP insurance is not mentioned on the DriveTime website, so it is recommended that customers contact the company directly to inquire about the price and any other relevant details. It is also worth noting that GAP insurance is optional, and customers can choose whether or not to include it in their purchase. This flexibility allows customers to customise their purchase according to their individual needs and budget constraints.

In addition to GAP insurance, DriveTime also offers a 30-day warranty on all vehicles at no extra cost. This warranty covers any issues that may arise within the first 30 days of owning the vehicle. DriveTime also offers DriveCare, an optional vehicle protection plan that provides extended powertrain coverage for up to five years or 50,000 miles. These additional protection options provide customers with further peace of mind and confidence in their purchase.

GAP insurance covers the remaining balance on a written-off car

GAP insurance is an optional auto insurance coverage that applies if your car is stolen or deemed a total loss. It covers the remaining balance on a written-off car, protecting you from depreciation. Once you buy your car, its value starts to decrease, and this depreciation leaves a gap between what you owe and the car's value. This is where GAP insurance steps in, covering the difference between the actual cash value (ACV) of the vehicle and the current outstanding balance on your loan or lease.

For example, if you owe $25,000 on your loan and your car is only worth $20,000, GAP insurance will cover the $5,000 gap, minus your deductible. GAP insurance is particularly useful if you've made a small down payment on your vehicle, have a long-loan term, drive a lot, or own a vehicle that depreciates quickly, such as luxury cars and large SUVs.

It's important to note that GAP insurance doesn't cover everything. It won't pay for overdue lease or loan payments, costs for extended warranties, credit life insurance, or other insurance purchased with the loan or lease. Additionally, it won't cover carry-over balances from previous loans or leases, financial penalties for excessive use, security deposits not refunded by the lessor, or amounts deducted by the primary insurer for wear and tear, prior damage, towing, and storage.

Regarding Drivetime specifically, they do offer optional GAP coverage on all of their vehicles. If your vehicle is deemed a "total loss" due to an accident, their GAP coverage will wipe away the amount you still owe on your loan.

GAP insurance is beneficial to the customer

DriveTime, the second-largest used car dealership in the US, offers optional Guaranteed Auto Protection (GAP) insurance on all its vehicles. GAP insurance is beneficial to customers as it covers the difference between the depreciated value of a car and the loan amount owed if the car is involved in an accident. This type of insurance is particularly useful for customers who have not made a down payment of at least 20% on their car or are paying off the car loan in more than five years. In these cases, customers may owe more than the car's current value, and GAP insurance can protect them from financial loss.

For example, if a customer purchases a car worth $28,000 with a 10% down payment, their loan cost will be $25,200. With a five-year auto loan and a 0% financing deal, their monthly payment will be $420. After 12 months, they will have paid $5,040 and still owe $20,160. If the car is totaled in an accident, the insurance company will calculate the current value of the vehicle, which is likely to be less than what the customer paid a year ago. If the car has depreciated by 20%, its value will be $22,400, and the customer's coverage will reimburse them for the outstanding balance on their loan, leaving them with $2,240 to put towards a replacement vehicle. However, if the car has depreciated by 30%, the insurance payout will be $19,600, and the customer will owe their lender $560. In this case, GAP insurance is needed to cover the remaining cost.

GAP insurance is also beneficial for customers who lease their vehicles, as it is generally required for leases. Additionally, it can protect customers who have rolled over negative equity from an old car loan into a new one. GAP insurance can help bridge the financial gap for drivers whose car loan balance is more than their vehicle's worth if it is totaled or stolen. This type of insurance typically costs around $61 per year and can be purchased from car insurance companies, banks, or credit unions. While it is not mandatory, it can provide valuable financial protection for customers who may struggle to pay off their car loans in the event of an accident or theft.

DriveTime is a used car dealership

DriveTime is the second-largest used car dealership in the US, with over 100 dealerships across the nation. They offer a wide range of used vehicles, including cars, trucks, vans, and SUVs, and pride themselves on providing a simple and pressure-free buying experience.

One of the unique aspects of DriveTime is that they are both the auto dealership and the bank, which gives them more flexibility with down payments and monthly payments, catering to each customer's unique financial situation. They also offer financing options for customers with bad credit or no credit history, making them more inclusive than many other dealerships.

In addition to their financing options, DriveTime provides a range of other benefits to their customers. They have a reservation program that allows customers to hold a vehicle for up to seven days. They also provide complimentary AutoCheck Vehicle History Reports for all their vehicles, ensuring transparency about the vehicle's history. Furthermore, DriveTime offers a 30-day warranty on all their vehicles and an optional vehicle protection plan for extended coverage.

One of the optional policies offered by DriveTime is Guaranteed Asset Protection (GAP). This type of coverage is beneficial in the event of a total loss of the vehicle due to an accident. GAP insurance covers the remaining deficiency balance on the totaled vehicle after the insurance payout, ensuring that customers are not burdened with paying off the remainder of the loan on an undrivable vehicle. This type of coverage can provide financial peace of mind and is a valuable option for anyone purchasing a used vehicle.

DriveTime offers financing options

Secondly, DriveTime offers interest rates as low as 5.9% (on approved credit) and the maximum interest rates are determined by each state's usury limit laws. DriveTime also allows customers to work directly with a Sales Advisor to build their loan, allowing them to find the right vehicle, down payment, and term to get the rate they want.

Thirdly, DriveTime offers a simple and no-pressure experience. They are the nation's second-largest used car dealership, with over 100 dealerships across the nation, and pride themselves on offering shoppers used cars, trucks, vans, and SUVs. DriveTime also provides a reservation program that allows customers to hold a car of their choice for up to seven days.

Finally, DriveTime offers a 5-day return guarantee on all vehicles, giving customers the option to return their vehicle within five days of purchase with no strings attached.

Frequently asked questions