GAP Coverage | A San Leandro Honda Guide

Everyone talks about it, but what is GAP Coverage and do you need it? Read on to get a quick rundown to learn how to protect your new Honda purchase with Guaranteed Asset Protection.

Protecting your new Honda

It's a simple fact that a new vehicle value starts to depreciate the moment it leaves the lot.

 

When financing a new car, the market value of the vehicle will likely be less than what you owe on your loan. Simply put - what you owe on your vehicle's loan is more than the vehicle is worth. Standard auto insurance policies generally will only cover the depreciated value of the car, or the market value.

 

This means that, in the event of an accident that totals your car, the insurance company will pay you based on the market value of the vehicle. What happens if this market value is less than your loan amount? Well, in that case you'll be on the hook to pay the difference EVEN IF the vehicle is no longer drivable. This difference in the market value and the loan amount is called the financial gap.

We’ve Got You Covered

Guaranteed Asset Protection (GAP) is one way to protect yourself from falling into this financial situation. GAP coverage basically erases the financial gap. Except for your deductible, you'll minimize the loss on your totaled car, leaving you clear to purchase a new vehicle. It's a great way to give yourself peace of mind while owning and driving a brand-new Honda.

We're Here To Help

We hope you found this general information helpful. As always when making a financial decision, it's always best to consult a professional financial advisor. Also, if you'd like, one of our certified Honda associates can reach out to you. Simply complete the form below and let us know how we can assist you. San Leandro Honda. Count on us!

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