Why You Should Consider GAP Insurance | McAllen, TX
When buying a new car, truck, van, or SUV at family-owned Bert Ogden McAllen Nissan, whether in-person following all CDC guidelines for COVID-19 or online using our Express Checkout platform, you will need to provide proof of insurance to take delivery of the vehicle. You can learn about Texas’ required minimum auto insurance on the TDI website.
Though not mandated by the Texas Department of Insurance, your lender may require you to add GAP insurance to your range of coverage. Even if your lender doesn’t require it, it’s a good idea to consider adding on GAP insurance when financing a new vehicle.
What is GAP insurance?
GAP (Guaranteed Asset Protection) insurance is extra coverage that takes care of your remaining loan balance if your vehicle is totaled, typically in the first few years after purchase. That’s because your insurance provider will likely value your totaled out vehicle at less than what you still owe your lender. For example, if you have a $20,000 loan, have your vehicle totaled out following a collision, and are given $15,000 from your insurance, you are still on the hook for the remaining $5,000 to your bank. That’s where GAP insurance comes in; it pays out that remaining amount (the gap, if you will) to pay off your loan. Because of this, many banks that offer car loans require borrowers to have this coverage.
What does GAP insurance cover?
The only time GAP insurance will come into play is if your insurer totals out your vehicle. Typically, it doesn’t matter why it’s being totaled out — collision, theft, vandalism, or damage from extreme weather. However, GAP insurance will only cover what you still owe on the loan after your collision or comprehensive coverage cuts you a check; you will not be reimbursed for whatever money you used as a down payment out of pocket.
Ready to get behind the wheel of a new Nissan model? The financing experts at Bert Ogden McAllen Nissan are ready to answer all your financing questions.