What Does Gap Insurance Mean To Me?

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  2. What Does Gap Insurance Mean To Me?
Now the big question of today's topic is going to be "what does gap insurance mean to me?" Well quite honestly potentially nothing if it is not something that you are even slightly interested in. If you think that it may be something that is worth your time then you will want to know all of the facts before making any type of commitment that way you are protecting yourself. One of the best situations to take advantage of gap insurance is when you are on a budget and looking to apply for a car with bad credit.

Gap Insurance Facts

There will be many people out there that will try to push the idea onto you that gap insurance will be a requirement for local bad credit used car financing, but that is not a requirement. It may however be a great choice for you when weighing out your expenses.

The vehicle is going to belong to the lender until your very last payment is made, this is something you already are well aware of I'm sure. Well taking that into consideration gap insurance is going to cost you an amount that will only pay its cash value. What that means is that unless you are in an accident that is considered a total loss the coverage that you will be covered. If it is however a total loss then you will typically only pay its cash value left. Problems occur when if this would happen when the insurance payout is low and the loan payoff amount is still very high. You are then going to have to make your payments until it is completely paid off even though you may no longer have the vehicle.

Best Times to Consider

These will be the best times to consider choosing gap insurance: Gap Insurance

  • The loan term is over 60 months long.
  • The total down payment is less than 20%.
  • You know that you drive more than 15,000 miles a year.

An extra fact to keep in mind is that this will be included in the purchase of your vehicle so that may make it look a little bit more appealing to you. It is not exclusively available from your dealer though a lot of insurance companies offer this as well so make sure that you do some rate shopping.

Taking all of this into consideration know that gap insurance may be for you, it may not be. It will depend on your circumstances, but if you feel that you fit the terms and it seems like a smart decision then it is very safe and you should have no worries!

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Do you meet the basic qualifications?

  • At least 1 year with current employer
  • A minimum income of $1,500 per month
  • No repossesions within the last year
  • Any bankruptcies must be discharged
  • Money down may be required, but not in all cases
  • Must be a current resident of the U.S. or Canada