Gapcover Insurance Protects You Financially.
Gapcover insurance for cars, Adelaide has for sale, is an insurance product that covers the insured against the ‘gap’ or ‘shortfall’ created due to the new or used car depreciating faster than the balance of the car loan and pays out the loan if the car is declared a ‘total loss’ by the comprehensive car insurer. A total loss loss defined by insurance companies means that your car is stolen and not recovered or is damaged beyond economical repair.
Gapcover insurance Adelaide has for cars stands for ‘Guaranteed Auto Protection Insurance’, and is often referred to as ‘shortfall insurance’.
Gapcover insurance can only be taken out by people that have a car loan or car finance and therefore also have comprehensive car insurance. Many insurance companies Adelaide has that insure cars have gapcover insurance as one of the insurance products they sell. Car loan lenders like gapcover insurance as part of the car loan because it gives them extra security; especially on used cars in Adelaide bought from respectable used car dealers.
How Gapcover Insurance For Cars works.
If there is an accident with your car, and the insurance company that has the comprehensive insurance on it declares the car as a total loss, then the car loan will be paid out regardless of what is owing. This is useful in the early stages of a car loan where you borrowed the full amount; or close to it. The market value of the car will decrease faster than the loan balance due to depreciation leaving you with a gap or ‘shortfall’.
Remember too that you purchased the car retail, which is the highest value. The Adelaide insurance company, or national insurance company will pay out the wholesale market value, which can be a few thousand dollars less. For larger amounts borrowed this gap gets bigger, and when gapcover insurance becomes even more important. This is also true for new cars which can depreciate up to 30 percent as soon as you drive them out of the dealership.
Benefits of Gapcover Insurance For Cars.
There are many benefits to having a gapcover insurance for cars policy including:
- Covering your financial exposure on the shortfall between what the market value comprehensive insurance payout is and what you still owe on the car loan if your car is written off or stolen.
- Protects your credit rating by eliminating the possibility of having to pay two car loans; the balance of the old loan and the new loan for the new car.
- The gapcover premium is a once off amount that can be financed and covers you for the complete term of the loan.
- Car loan lenders like to add gapcover insurance to the car loan because they know if the car is a write off they will be paid out in full.
- Additional lump sum payment; usually in the amount of between $4,000 and $6,000, depending on the insurance company to cover any other expenses; or to help purchase a more expensive car.
- Gapcover insurance covers new and used cars Adelaide has for a total loss, i.e. written off in an accident or stolen.
Who qualifies for Gapcover Insurance?
Anyone that has a car loan on their car and has comprehensive car insurance cover; which is required by law in any case, qualifies to have gapcover insurance for cars.
Cost of Gapcover Insurance For Cars.
As with all insurance product premiums they vary with the different insurance companies Adelaide and Australia has, so before taking out gapcover insurance for cars, it would be wise to discuss gapcover with your insurance broker from National Finance Choice. You will also notice by reading the product disclosure statement from each insurance company that there will be different ‘extra amounts’ the insurer will pay out if your car is written off or stolen. Gapcover premiums are generally in the range of $2,000 depending on the level of cover you take out, which equates to around a dollar a day on a 5 year loan term, making it very affordable and gives you extra piece of mind when purchasing a new or used car Adelaide has for sale.
Note too that gapcover insurance is available on motorcycles and marine craft.