Imagine driving off the car lot after having been through the tiresome ordeal of purchasing a new car. A brief lapse in judgment causes the driver to wreck into another car, causing significant damage to the new auto.
The new car is already declared a total loss by the driver’s auto insurance. Worse, the auto insurance company has determined that the actual cash value of the car is suddenly far less than the amount the driver owes the lender. Just by driving the car off the lot, the car had already lost value.
This is where GAP auto insurance may come in handy.
Auto Insurance: What Is GAP Insurance?
GAP actually stands for Guaranteed Auto Protection. However, its definition is just as it sounds: it closes the gap between what the driver owes on a loan and what the auto insurance company has determined for the actual cash value (ACV) of the damaged car in the event of a total loss.