What is ALA Gap Insurance?
Roundup and Review.
When buying a new car, you’re often offered a range of extras from a dealership. One of these extras is Guaranteed Asset Protection (GAP) insurance. It’s designed to cover the difference between what an insurer will pay out if the car is stolen or written off, and the amount you actually paid for the vehicle.
As with anything, there’s pros and cons of GAP insurance and it’s important to consider both when trying to decide if it’s the right option for you. Here, you’ll discover everything you need to know to help you make the wisest decision.
The pros of GAP insurance
So, let’s start with the benefits of GAP insurance. The most obvious is the fact it will enable you to replace your car if it is stolen or written off.
Standard insurance policies will typically only cover a fraction of what you actually paid for the vehicle. This means you’ll usually need to find a large lump sum of money in order to replace it. With GAP insurance, you’ll be given the exact amount you need to replace the car, ensuring you can get back onto the road in no time.
It’s especially great for cars which have a high depreciation value, as well as more luxurious models which will be expensive to replace. GAP insurance basically provides you with complete peace of mind in case the worst does happen, and it is written off.
The cons of GAP insurance
There are two main disadvantages of GAP insurance. The first is the cost and the second is it cannot be transferred. So, if you plan on selling the car before the policy ends, you won’t be able to transfer the policy to a new vehicle. This means if you’re planning on selling the car, you may want to hold off taking out GAP insurance.
The cost is another disadvantage, though it is possible to find better deals if you shop around. The insurance policies offered by dealerships, for example, are usually much higher than those offered by genuine insurers.
As you can see above, there are clear pros and cons which do need to be considered. If you’re buying an expensive car which is known to have a high depreciation, GAP insurance could prove extremely useful, but only if you’re not planning on selling the car anytime soon.
Used Car Guy
Buying a new car?
If so, it’s critical to run your own HPI Check.