As our economy makes a slow change to a new norm, many industries are realizing that they need to make a change. That includes the auto industry. Leasing a vehicle was at one time a not very popular especially when leasing a car as a bad credit buyer. However today, it has gained some footing and is becoming an affordable choice. At Auto Credit Express we want to help you save in every area in your financial life, but also to prevent you from being stuck with any unexpected costs that may come from rent-to-own agreements.
What GAP Insurance covers
Guaranteed Auto Protection, or 'GAP', is insurance was specially created for rent-to-own vehicles or when leasing a car, truck or SUV. Let's say that your contract that you signed for your new car says its original worth was $20k. It's now a year later and your car is only worth about $15k. If you get into accident and total your car, your insurance will cover the cost of your vehicle's current worth. The problem is you're still paying for a $20k automobile. This means that you're responsible for paying the remaining $5000 that the car lost in depreciation. That's not exactly money most people have laying around. This is where your GAP Insurance will kick in and cover the 'gap' between the insurances' coverage and the car's worth.
As we see it
If you're still not convinced that you need GAP insurance consider this:
- A new vehicle will lose on average 11% of it's worth right off the lot.
- It will continue to depreciate at a rate of 15-25% each year.
Luckily, most dealers include GAP insurance in their contracts. However a few do not. Make sure that you find a dealership that will give you the best options and not leave you in a sticky situation. At Auto Credit Express, we work with a nationwide network of dealers that are reliable and dependable whether you decide to lease or buy your next car. Simply complete our quick and easy online application and our team of professionals will find you local dealers in your area.