Gm Gap Insurance: Peace Of Mind

GM GAP insurance is an optional type of car insurance that covers the difference between what a car is worth and what the driver owes on their auto loan or lease if the car is totaled or stolen. It is endorsed by GMC and General Motors and can be purchased from a car insurance company, bank, or dealership. The cost of GM GAP insurance varies depending on where it is purchased, with dealerships and banks charging a one-time fee of up to $700, and insurance companies charging as little as $3 per month.

What is GM gap insurance?

GM Gap Coverage is an optional type of car insurance that covers the difference between what a car is worth and what the driver owes on their auto loan or lease if the car is totaled or stolen. It is endorsed by GMC and General Motors and is available for any finance amount on new or pre-owned vehicles at the time of vehicle purchase. It can be cancelled at any time and has no maximum dollar amount on covered losses that are waived.

Gap insurance is useful if you have a large auto loan, a long-term loan, or a car that depreciates in value quickly. It is not required by state law but may be required by lenders and lessors. It is relatively affordable, costing between $20 and $40 per year when added to a car insurance policy, or between $400 and $700 when purchased from a dealership.

If you have collision or comprehensive coverage, your car insurance company will pay the value of your car in a total loss settlement, not what you owe on a car loan or lease. Gap insurance can help bridge that gap if you owe more on your car than what it’s worth. It covers the difference between what you owe on a car lease or loan and the amount paid out in a total loss settlement from an auto insurer, minus your deductible.

Gap insurance does not cover engine failure, transmission failure, death, your car insurance deductible, overdue payments and late fees on your car loan or lease, extended warranties, carry-over balances from previous loans or leases, lease penalties for high mileage or excessive use, or charges for credit insurance connected to the loan.

When do you need GM gap insurance?

GM GAP insurance is a type of insurance that provides financial protection in the event of a total loss of your vehicle. It covers the difference between what your car is worth and what your insurance company will pay if it is totaled. GAP is an acronym for "guaranteed auto protection" or "guaranteed asset protection".

You need GM GAP insurance if you don't have a lot of equity in your vehicle. This happens when your trade-in wasn't worth much, or you didn't put much money down. A general rule of thumb is that you should have GAP coverage if you put less than $5,000 down on the car. However, this rule doesn't apply if you buy a more expensive car, as the car's value depreciates quickly once driven off the lot. In this case, you would need to put more money down to avoid needing GAP insurance.

GM GAP insurance is also useful if you have a protracted loan payoff period, as you may owe more than the car's current value. It is also recommended if you have leased your vehicle, as GAP coverage is included on any lease by default.

You can choose a coverage term that fits your driving lifestyle, with options ranging from 0-60 months, 61-72 months, and 73-84 months. You can cancel your GAP coverage at any time, and it is fully refundable within 60 days.

Where can you buy GM gap insurance?

If you're looking to buy GM gap insurance, you can purchase it from a variety of sources, including:

• Car dealerships: Dealerships often provide the convenience of one-stop shopping for your vehicle and gap insurance needs. However, it's important to note that buying gap insurance from a dealership will likely be more expensive than adding it to an existing insurance policy. The cost of gap insurance from a dealership is typically added to the principal amount of your loan, which can result in higher interest charges over time.
• Insurance companies: Many major auto insurance providers, such as State Farm, Nationwide, Progressive, Allstate, USAA, AAA, and Esurance, offer standalone gap insurance policies or include them as add-ons to comprehensive car insurance policies. Purchasing gap insurance from your existing insurance provider is often the most cost-effective option.
• Lenders and finance companies: You can also obtain gap insurance from car loan lenders or finance companies. However, similar to dealerships, the cost of purchasing gap insurance through these entities may be higher than going through your insurance company.
• Banks and credit unions: Banks and credit unions are another option for purchasing gap insurance. They can provide information on available policies and help you find the right coverage for your needs.

When considering where to buy GM gap insurance, it's essential to compare prices and coverage options from multiple providers to ensure you get the best value for your money. Additionally, keep in mind that gap insurance is typically only available if you are the original loan or leaseholder of a new vehicle, although some providers may offer it for certain used vehicles as well.

How much does GM gap insurance cost?

Gap insurance is an optional type of car insurance that covers the difference between what a car is worth and what the driver owes on their auto loan or lease if the car is totaled or stolen. This type of insurance is designed to protect drivers from paying on a vehicle that is a total loss. In other words, gap insurance covers the "'gap'" between what a car is worth and what is owed on a loan or lease.

The cost of GM gap insurance depends on where you buy it. Dealerships and banks typically charge a one-time lump sum of between $400 and $700 for gap insurance, making them the most expensive option. Since the sum is usually added to your auto loan, you will also have to pay interest on it.

Car insurance companies, on the other hand, offer the best deals on gap insurance, with prices as low as $3 per month for coverage. Instead of charging a lump sum, insurers include the cost in your regular premium payments.

Chevrolet, for example, offers GAP Coverage that can be purchased at the time of vehicle purchase for new or pre-owned vehicles. This coverage is available for finance amounts up to $125,000 and can waive your financial loss up to $75,000, including up to $1,000 of your insurer's physical damage deductible.

What does GM gap insurance cover?

GM gap insurance covers the difference between what you owe on a car lease or loan and the amount paid out in a total loss settlement from an auto insurer, minus your deductible. This means that if your car is declared a total loss, GM gap insurance will cover the "gap" between the amount your insurer pays out and the amount you still owe on your finance agreement.

GM gap insurance is available for any finance amount on new or pre-owned vehicles and can be purchased at the time of vehicle purchase. It can be cancelled at any time and there is no maximum dollar amount on covered losses that are waived.

GM gap insurance does not cover your car insurance deductible, overdue payments and late fees on your car loan or lease, extended warranties, carry-over balances from previous loans or leases, lease penalties for high mileage or excessive use, or charges for credit insurance connected to the loan.

Frequently asked questions