What is GAP Insurance?

Gap insurance, also known as gap protection or guaranteed asset protection, is a type of auto insurance coverage that helps protect you financially if your car is totaled or stolen and the amount you owe on your car loan or lease is higher than the car’s actual cash value. Learn more about how to protect your Clayton or Ladue vehicle, below!

What Else Does GAP Insurance Cover?

When you purchase a new car, its value typically depreciates quickly, especially in the early years of ownership. If your car gets totaled or stolen during this time, your primary auto insurance will typically only cover the car’s actual cash value, which may be significantly lower than the amount you owe on your loan or lease. This is where gap insurance comes in. So, what is GAP protection? While it doesn’t cover bodily injuries, mechanical repairs, or your deductible, it covers:

• Theft
• Fire
• Vandalism
• Accidents
• Nature damages (tornado, hurricane, flood, etc.)

Having this type of coverage comes in handy when regular insurance won’t cover all of these unexpected inconveniences.

Gap insurance bridges the gap between what your primary auto insurance pays and the remaining balance on your loan or lease. It ensures that you are not left with a substantial financial burden if an unfortunate event occurs. Without gap insurance, you could be responsible for paying the difference out of pocket.

Is GAP Insurance Worth It?

Gap insurance is particularly useful for individuals who have financed their vehicles with a small down payment, have a long loan term, or are leasing a car. It provides added peace of mind and financial protection in situations where the car’s value has significantly depreciated, and you would otherwise owe more than the insurance payout.

How Can I Get GAP Insurance?

It’s important to note that gap insurance is typically an optional coverage that you can purchase separately from your primary auto insurance. It is available through insurance companies, financial institutions, and sometimes even car dealerships. The cost of gap insurance can vary depending on factors such as the value of your vehicle, the length of your loan or lease, and the insurance provider, and can cost as little as $20 per year.

Before deciding to purchase gap insurance, it’s recommended to carefully review your auto insurance policy and consider your individual circumstances. Assess the potential risks and determine whether the additional coverage is necessary to protect your financial interests in the event of a total loss or theft of your car.

Learn More About Insurance & Financing at Mercedes-Benz of St. Louis!

When you are ready to insure your new vehicle, contact our finance department at Mercedes-Benz of St. Louis near Frontenac. Our expert staff is standing by to help answer any questions you may have.