Is Gap Insurance Worth It?

As you shop for a new vehicle in greater Niagara, you’ll likely have to consider a number of foreign concepts. One is gap insurance. If you’re unsure about what gap insurance on a car is, you’re not alone. Take a moment to learn all about what gap protection is and whether gap insurance is worth it. Then, apply for financing and contact Performance Mercedes-Benz to arrange to meet with our financiers to discuss your insurance options in St Catharines!

What is Gap Insurance On A Car?

Gap Insurance is also called Guaranteed Asset Protection. So, what is gap protection? Gap insurance covers the difference between the cash value of your vehicle and remaining principal on your auto loan. So, say a Niagara-on-the-Lake vehicle is totalled. In that event, insurance would not only pay the value of your vehicle, but if your outstanding loan balance is more than what your vehicle is worth, that gap will also be covered. Bear in mind, however, that gap insurance only covers certain types of loss, including:

• Accident
• Vandalism
• Fire
• Theft
• Acts of nature (flood, hurricane, tornado, etc.)

It doesn’t cover bodily injury or property damage. With that in mind, is gap insurance worth it?

Is Gap Insurance Worth It?

Now that you know what gap protection is, you may be wondering if it’s right for you. Gap insurance tends to be optional because it’s well-suited to different situations and unnecessary for others. Here are a few situations in which you might want to consider gap insurance:

• New vehicles take a big hit to their value as soon as they’re purchased. There’s an awkward period at the beginning of car ownership where you may owe a little more than the vehicle is worth. This discrepancy stabilizes over time, as rates of depreciation slow down each year. However, in the first few years of ownership, gap insurance tends to be a sharp investment.
• If you made a small down payment, you may want to consider getting gap insurance. That’s because you’ll likely be carrying a larger loan. In the event that your vehicle is totalled, you’ll want to make sure that the difference in your vehicle’s value and your remaining loan balance is covered!

Do You Have More Questions About What Gap Insurance is On A Car?

If you’re still not 100% sure about what gap protection is whether gap insurance is worth it for you, call Performance Mercedes-Benz at 905-685-3838 to speak with our financiers. They’re on standby and ready to help Pelham neighbours with all things related to car finance and insurance. And if you’re currently in the market for a new Mercedes-Benz for sale, explore our online inventory!