As a car owner, you may have heard about gap insurance and how it can protect you in the event of an accident. But what happens if you didn’t purchase it when you first bought your car? Can you still add gap insurance later on? Here’s what you need to know.
Understanding Gap Insurance
Gap insurance, or Guaranteed Asset Protection, is an optional insurance policy that can help cover the difference between what your regular auto insurance covers and the remaining balance owed on your car loan. In other words, if your car is totaled or stolen and the amount offered by your regular auto insurance isn’t enough to pay off your loan completely, gap insurance can help fill in that financial gap.
Adding Gap Insurance Later
If you didn’t purchase gap insurance when buying your car but now want to add it later on, there are a few things to keep in mind:
Your Car Must be Eligible
Firstly, not all cars may be eligible for adding gap coverage after purchasing them. Some lenders require that buyers get this type of coverage at the time they’re securing their loans. Before deciding whether to pursue this option always check with the lender initially.
Cost
Secondly, adding gap coverage later might cost more than getting it at a time of purchasing since some insurers consider individuals who decide not to get true immediate coverage even riskier drivers than those who secured guaranteed protection from day one.
Refinancing Your Loan Might Be Required
Adding gap coverage after obtaining an automotive loan will commonly require refinancing- rearranging payment terms through another valid resource – this costs extra dollars most times. So make sure everything else works out financially before taking action having done thorough research.
The Bottom Line:
While adding gap protection days past owning might look challenging don’t worry as long as certain steps are taken beforehand like checking eligibility options available (from both lending institutions and insurance providers), along with taking into consideration costs, refinancing options and any other pertinent factors that could impact this decision. Not all hope is lost as you can still protect your financial investment even if it was not initially chosen at the time of purchasing.
By following these tips, you can make an informed decision about whether to add gap insurance later on – and potentially save yourself from a financial pitfall in case something unfortunate happens to your car.
FAQs
Q: Can you add gap insurance later if you didn’t purchase it at the time of buying your vehicle?
A: Yes, in most cases you can add gap insurance after purchasing a vehicle. Many insurers allow customers to purchase and add gap coverage at any point during their car loan or lease agreement.
Q: How much does adding gap insurance later cost?
A: The cost of gap insurance varies depending on a number of factors such as your insurer and the value of your car. If you’re adding it later, the price may be higher than if you had purchased it initially along with your standard auto policy.
Q: When is it too late to get gap insurance?
A: Generally speaking, in order to qualify for gap coverage, your vehicle must still be fairly new (often less than 2-3 years old). Some insurers may offer extended coverage options for older vehicles, but there will usually be restrictions and limitations. In addition, most insurers require that you have comprehensive and collision coverage on the vehicle in order to qualify for gap protection.
