Nationwide does not disclose their exact costs for gap insurance, but gap insurance costs an average of $20 to $40 per year when added to an existing car insurance policy. Gap insurance covers the difference between a car’s actual cash value and how much is still owed on a loan or lease.
Many lessors and lenders require gap insurance on a new car. Car dealers often sell gap insurance directly at the dealership to make the process easier, but buying gap insurance from a dealership often costs significantly more than purchasing through your insurer.
To get a personalized quote for gap insurance from Nationwide, call Nationwide customer service at 1 (877) 669-6877.
Gap insurance costs around $3 per month when you add the coverage to your car insurance policy. When you purchase coverage from a car dealership instead, a gap insurance policy will cost a total of $400 to $700 in most cases.
A gap insurance policy covers the difference between what a leased or financed car is worth and how much the driver owes Like any other type of insurance, the cost of gap insurance varies depending on the car’s value and the driver’s risk characteristics, such as age and claims history.… read full answer
How to Get Cheap Gap Insurance
Some car leases include gap insurance at no added cost. But besides this free coverage, buying gap insurance from your normal car insurance company is usually the cheapest option. On average, gap insurance will only add around 5% to 6% to your comprehensive and collision cost. But since gap insurance is a relatively uncommon kind of coverage, not every insurance company offers it.
If your insurer does not provide gap insurance, it’s a good idea to compare quotes and see if it would be worth switching companies. If not, some companies offer standalone gap insurance policies. Also, if you are financing a car through a bank or credit union, these institutions will usually offer gap insurance upfront for anywhere from $200 to $700.
How Much Is Gap Insurance from a Dealer?
Dealerships are often the most expensive source of gap insurance, costing around $400 to $700 up front. If you are buying gap insurance that is rolled into your loan, bear in mind that you will be paying interest on the gap insurance premium as well as the rest of the loan’s balance. As a result, you’ll actually end up paying more than the original cost. This also comes into play wherever else you might get auto financing and gap insurance at the same time, including banks and credit unions.
However, price is not the only factor that should affect your decision of where to buy gap insurance. You should also consider how long your gap coverage will last and how long you will need it. Similarly, some gap insurance policies will pay your deductible, although many will not. And most gap insurance policies do not pay for anything you owe from a previous car loan.
Gap insurance is worth the money whenever you owe more on your car loan or lease than the car is worth. For example, if you paid a small down payment on your car, your loan term is 4-5 years or your car will depreciate quickly, you should consider getting gap insurance. … read full answer
Gap insurance is never mandated by state law, and few lenders or lessors require it, so the decision to buy it depends on personal circumstances.
Gap Insurance Is Worth It When:
You don’t have the savings to pay off your loan or lease if the car is totaled or stolen.
Your down payment is less than 20% of the car’s value.
Your loan will last four years or more.
You drive more miles than average, which reduces the car’s value faster.
Your car is a make and model that depreciates especially fast, like a luxury sedan or electric vehicle.
You are a single-car household and need a car to get around.
Your loan includes negative equity from your last car.
Since gap insurance covers the difference between the car’s actual cash value and the amount you owe, researching these two numbers will be a key deciding factor in whether gap insurance is worth it.
Why Getting Gap Insurance Is Worth It
For example, say you buy a car for $20,000 and your down payment is $2,000. This small down payment suggests that gap insurance might be worth it, but it’s still a good idea to check the car’s anticipated value after a year to determine if there will be a gap. If the car is worth $12,000 after a year but you’ll still owe $15,000, gap insurance could be a smart investment. If you don’t buy gap insurance and this car is totaled after a year, you’ll still owe $3,000 even though you can no longer drive it.
On the other hand, if your down payment is large enough or the car’s resale value is high enough that you’ll never owe more than the car is worth, gap insurance is unnecessary. Similarly, if you do owe more than the car is worth but you have the resources to pay the difference if the worst happens, it might be worth taking the risk.
You can buy gap insurance from most major insurance companies, including Progressive, Nationwide, State Farm, and Allstate. Another place where you might be able to purchase gap insurance is through your car dealership.
However, if you buy gap insurance from a dealership, you might end up paying extra because the cost is added to your principal, which is then used to calculate your interest. So, you might save money by asking your insurance company to add gap insurance to your policy.… read full answer
If you already have car insurance, the easiest way to buy gap insurance coverage is to contact your existing insurance provider and ask about adding it to your policy. If you do not have car insurance, compare quotes from major insurance companies that offer gap insurance. You can find the best options to purchase gap insurance listed below.
You can also buy gap insurance from the bank or credit union financing your car. However, like car dealers, other lenders usually calculate the cost of gap insurance as one upfront payment, then add the sum to your loan amount. As a result, it’s best to avoid this type of gap insurance to keep from paying interest on your premium.
Why You Should Consider Buying Gap Insurance
Gap insurance provides protection on a car you lease or buy with a loan. In the event of an accident in which your car is totaled, the value of your car would drop below the money you owe on the lease or loan. Standard insurance policies would pay only the value of the car post-accident. Gap insurance would ensure that you can pay back the full amount you owe. That is why auto lenders typically require it.
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