What Time Frame is Allowed to Buy Gap Insurance?
What is gap insurance? Well, while it’s definitely not a requirement, 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 in 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.
Lender = At the Time of Purchase
Buying gap right at the time of your vehicle purchase is ideal. Getting it through the lender, however, is not always such a good deal. Often you will find gap coverage cheaper when you buy it through your car insurance carrier rather than a company you don’t have a prexisting 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 really is not difficult.
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 which totals your vehicle. Waiting the thirty days could be a very bad decision.
Loan/Lease Payoff = Any Time
It is similar to gap insurance, however, 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.
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.