What Time Frame is Allowed to Buy Gap Insurance?
What is gap insurance? Unless you have a particularly strict auto loan, gap insurance not a requirement, but it can certainly come in handy if you’re in a costly accident and financed your vehicle with help from a third party lender. Gap insurance, as the name implies, covers the gap between the amount the amount you still owe in your auto loan and your car’s appraised actual cash value (ACV) at the time of a crash.
When Are You Allowed to Buy Gap Insurance?
Gap insurance can be purchased from a couple of different sources, but you can’t dilly around before making up your mind. The time frame during which you can purchase gap insurance may vary, but only slightly. It’s a good idea to make your decision on whether or not you need gap insurance as soon as possible.
It is important to decide where you are purchasing gap insurance to establish the time frame allowed in making the purchase.
Something else to keep in mind is that although you may not initially think you need gap insurance if you have an extended repayment plan, your vehicle just might depreciate faster than you can pay off the loan. If this is the case for you, it’s worth talking it over with a financial advisor to see if you’re a candidate for gap insurance and whether or not it’d be worth it for you.
Buy From Your Lender At The Time of Purchase
Buying gap insurance right at the time of your vehicle purchase is ideal. Getting it through the lender, however, is not always a good deal. Often, you will find cheaper gap coverage when you buy this insurance through your existing car insurance carrier rather than a company you don’t have a relationship with. The best thing your lender can offer you is convenience. However, mentioning gap insurance to your insurance agent when putting car insurance on your new vehicle is not difficult.
Buy From Your Car Insurance Company Within 30 Days of Initial Purchase
If you purchase gap coverage through your car insurance company, make sure you keep the coverage if you switch insurance carriers. Most insurance carriers will honor the coverage if it is on your prior policy. This is the one time most insurance companies will offer gap coverage past the 30-day time frame.
Gap insurance through your car insurance carrier is often reasonably priced. A couple of dollars a month can be a huge blessing if you are ever in a major car accident that totals your vehicle. Waiting the thirty days could be a very bad decision.
Difference Between Gap Coverage And Loan/Lease Payoff
Loan/Lease Payoff coverage is similar to gap insurance, but loan/lease payoff has some limitations. Loan/Lease payoff can potentially be purchased at any time. You will need to check with your insurance carrier to see if it’s offered and its availability.
Gap insurance coverage is different – both are worth discussing with your auto insurance agent.
The Best Time to Purchase Gap Insurance
The best time to purchase gap insurance is right when you purchase your vehicle, whether it is from a lender or your car insurance. Unfortunately, accidents can happen within the first 30 days of purchase, and you want to be protected in the event that one does. This potentially makes the time frame critical for having the coverage. Take the time to consider gap insurance and finalize the purchase without procrastinating.