Don't Forget the GAP

Imagine you just bought a new car, no more than 13 miles on the vehicle. The thirty thousand dollar vehicle is your dream car, and you work out a financing deal. Two weeks later you're in a car wreck with no fault found.

There is no question of whether you have collision car insurance, but did you get that gap insurance? The car insurance company says your thirty thousand dollar dream is a total loss and they are only going to cover seventy-five percent of the car's value. Who covers the rest of the balance?

If you have gap insurance, the difference is covered but if you did not get gap coverage then you're going to be responsible for the other twenty-five percent of that thirty thousand dollars.

Guaranteed Asset Protection, better known as gap insurance, covers the amount due after your car insurance makes its maximum payout.