To decide whether you should buy auto GAP coverage, you may need a simple example showing in what kind of situation GAP is needed.

There is no wonder that your just purchased car can depreciate greatly within first two years (up to 40%) Imagine you bought a car for $45,000. Several months later your car was damaged. The damage resulted in great depreciation of your car's value. After the accident the market value of your car became $35,000. But your loan is still $43,000, which means loss of $8,000.

GAP, "guaranteed asset protection" is usually offered by the dealership when buying new car. GAP is designed to protect you from sufficient depreciation of your car. If you don't want your car's market value to depreciate lower than your loan balance, purchase GAP.

Note that cars that are used for leasing are most likely have been insured with GAP coverage.

GAP is worth buying if:

1. You don't want your car's value to depreciate lower than loan value.
2. You are not going to pay down a large down payment.

Where should I get GAP coverage?

Buying GAP from your auto insurance agent is the best way to get affordable GAP coverage. The dealership's representative, to the contrary, is likely to offer higher price ant try to persuade you to buy it from him. You, however, being sensible customer should not hurry. In case you don't buy GAP from your dealership you will be able to buy it from your insurance agent. And as it was said insurance agent is sure to offer better price. You can stop using GAP after a few years from the moment of the purchase.

Being on the safe side, contact you agent before refusing to buy GAP from the dealership to make sure your agent offer such coverage.

When you buy your new car you feel exited. At such moments emotions prevail over your mind and you can do what is not worth doing. Contact you agent and be more sensible. There is no need to buy anything twice expensive.

Save extra money on your car insurance!