{"id":6129,"date":"2022-06-13T08:44:37","date_gmt":"2022-06-13T15:44:37","guid":{"rendered":"https:\/\/www.costulessdirect.com\/?p=6129"},"modified":"2022-12-21T11:29:57","modified_gmt":"2022-12-21T11:29:57","slug":"what-is-gap-auto-insurance-in-california-and-when-do-i-need-it","status":"publish","type":"post","link":"https:\/\/www.costulessdirect.com\/blog\/what-is-gap-auto-insurance-in-california-and-when-do-i-need-it\/","title":{"rendered":"What is GAP Auto Insurance in California and When Do I Need It?"},"content":{"rendered":"\n
GAP auto insurance which stands for \u201cGeneral Auto Protection,\u201d is an add-on coverage that bridges the gap between what your car is worth and what you still owe on it when it\u2019s totaled or stolen. <\/p>\n\n\n\n
In a perfect world, you\u2019d never have even a fender bender while driving in California. But out here in reality land, bad things can happen to your auto even if you drive with a textbook level of safety. <\/p>\n\n\n\n
The worst of these bad things can leave your car so damaged that your auto insurance company<\/a> doesn\u2019t even want to try to pay for repairs. Their \u201cby the numbers\u201d thinking is that repairing it would cost more than the automobile is even worth. So they give you a flat rate based on its market value related to its age, make, and model. <\/p>\n\n\n\n Or your ride gets stolen and ends up possibly at the bottom of some nearby lake, to be discovered in 20 years or so. <\/p>\n\n\n\n Either way, you\u2019re out of a car. Sure, you have a settlement check, but it might miss your loan payoff figure by a few or even several thousand dollars. One of the leading culprits of this imbalance known as \u201cnegative equity\u201d is an economic phenomenon known as depreciation. This describes the speed with which your new car loses its value. <\/p>\n\n\n\n Around $20 to $40 per year. If you\u2019re dealing with an independent auto insurance agent<\/a>, they\u2019ll be able to shop around for the most affordable and comprehensive GAP insurance coverage policy available. In that way, it\u2019s likely that the cost might only be $20 to $40 a year, a rate that you\u2019ll hardly miss. But the return on this savvy investment could be enormous. <\/p>\n\n\n\n As soon as you drive it off the dealership lot. At least, that\u2019s the flippant answer\u202fand there\u2019s\u202ftruth behind it. It\u2019s immediately worth less after you\u2019ve driven it away because it\u2019s now considered a \u201cused\u201d vehicle. <\/p>\n\n\n\n To put it another way, you\u2019ll lose 20%<\/a> of what you paid for your new car after the first year and only be able to command half of your sticker price after five years. That\u2019s assuming your vehicle still looks to be in good shape (few if any nicks, scratches, or dents and not parked full-time near a salty California beach<\/a>) and is running well for its age. <\/p>\n\n\n\n This rate of depreciation isn\u2019t consistent over all makes and models. Some depreciate faster than others, and a few might even retain value. And, of course, if you keep certain models long enough and in new-like condition, they might eventually become a valuable classic or vintage ride. <\/p>\n\n\n\n That\u2019s rare, though. The more common and realistic scenario is that your car will lose value over time \u2014 not retain or even gain it. So what happens if you have a six-year loan at a higher interest rate and you total your vehicle in an accident or lose it to thieves? <\/p>\n\n\n\n That\u2019s where your very affordable GAP insurance<\/a> policy add-on comes to the rescue. <\/p>\n\n\nWhat Does GAP Insurance Cost in California? <\/h2>\n\n\n\n
How Quickly Does My New Car Depreciate in California? <\/h2>\n\n\n\n