Guaranteed Auto Protection (GAP) coverage is an insurance policy premium for newly purchased cars. It covers the deficit between the actual value and the value owed on your vehicle in the event of a total loss in an accident. This premium can save you from making car payments for a totaled vehicle you are no longer in possession of. Here at Karnas Law Firm, we believe all our clients should be well informed on purchasing gap insurance to ensure complete coverage of their new vehicle.
Car Depreciation: How Much Value Will a New Car Lose?
Comprehensive and collision insurance policies only cover the market value of your car. Chances are your newly purchased car will have heavy depreciation values. A new car typically loses value much more quickly than what you owe on it. This creates an “upside-down situation.” The value of a new car averages a loss of 10% the second it drives off the lot and 40% every year after that. In 5 years, an average “new” car will cost less than half of what it initially cost. Meanwhile, the loan amount stays at a fixed rate. GAP insurance covers the difference between the actual cash value (ACV) and the remaining payment amount owed in the event of a total loss.
How Does a GAP Insurance Plan Impact Your Car’s Value?
For instance, if the value of your car was appraised at $22,000 and you still owe $24,000 at the time of an accident, a GAP insurance policy would cover the $2,000 gap. Without it, you would still need to pay $2,000 on the vehicle regardless of who the at-fault driver is.
GAP coverage is often overlooked but can save you in the long run. GAP gives consumers the peace of mind knowing this deficit will not have to be paid if their vehicle is totaled. Here at Karnas Law Firm, we advise our clients to make a well-informed decision in purchasing GAP coverage.
Experienced Car Accident Attorneys in Yuma, Arizona
If you’ve suffered from a car accident, you’ve already suffered enough. Don’t attempt to navigate the legal complexities of the accident alone. Reach out to our proven and trusted car accident attorneys today.
The car accident lawyers at Karnas Law Firm are here to help you recover the maximum amount available for all associated damages. With more than 25 years of experience representing injured accident victims in Arizona, we understand the stress of being injured as a result of a third party’s negligence. Our team can lift the burden of settling a personal injury claim from your shoulders and relentlessly fight for fair compensation.
Our attorneys are known as some of the top lawyers in the business and have received accolades such as Top 100 Civil Plaintiff Lawyers and Top 100 Trial Lawyers. We are also Lead Counsel rated. We are available in Tucson at (520) 338-1641 or at our Yuma location at (928) 550-8020. You can also email Olivia Gaxiola at firstname.lastname@example.org to set up an appointment.
To get started on your case, contact us today for a free case evaluation. We look forward to talking to you soon.