AAA Gap Insurance: Your Ultimate Guide

What is AAA Gap Insurance?

AAA gap insurance, also known as guaranteed auto protection (GAP), is an optional insurance coverage that protects you from owing more than your car is worth in the event of a total loss or theft. This type of coverage is typically purchased when you finance or lease a new or used vehicle.

Why Do I Need AAA Gap Insurance?

There are a number of reasons why AAA gap insurance may be a good idea for you:

• Your car is worth less than you owe on it. According to the National Automobile Dealers Association (NADA), the average new car loses 20% of its value in the first year and 10% of its value in each subsequent year. This means that if you finance or lease a new car, you may be upside down on your loan or lease for several years.
• You have a high deductible on your auto insurance policy. If you have a high deductible on your auto insurance policy, you may be responsible for paying a large amount of money out of pocket in the event of a total loss or theft. AAA gap insurance can help you cover this gap.
• You are leasing a car. If you are leasing a car, you are required to return the car to the leasing company at the end of the lease term. If the car is totaled or stolen, you may be responsible for paying the remaining balance on the lease, even if you have already paid off the majority of the loan. AAA gap insurance can help you cover this gap.

How Much Does AAA Gap Insurance Cost?

The cost of AAA gap insurance varies depending on the value of your car, the length of your loan or lease, and your deductible. However, the average cost of AAA gap insurance is between $200 and $500.

Is AAA Gap Insurance Worth It?

Whether or not AAA gap insurance is worth it for you depends on your individual circumstances. If you are upside down on your loan or lease, have a high deductible on your auto insurance policy, or are leasing a car, then AAA gap insurance may be a good investment.

How to Get AAA Gap Insurance

You can get AAA gap insurance from your AAA insurance agent. You can also get GAP coverage from other insurance companies, but AAA offers some of the most competitive rates.

Step-by-Step Approach to AAA Gap Insurance

Here is a step-by-step approach to getting AAA gap insurance:

1. Determine if you need AAA gap insurance. Consider your individual circumstances and whether or not you are upside down on your loan or lease, have a high deductible on your auto insurance policy, or are leasing a car.
2. Get quotes from different insurance companies. Compare the rates and coverage options from different insurance companies to find the best deal.
3. Purchase AAA gap insurance. Once you have found the best deal, purchase AAA gap insurance from your AAA insurance agent.

Pros and Cons of AAA Gap Insurance

Pros:

• Protects you from owing more than your car is worth in the event of a total loss or theft
• Provides peace of mind knowing that you are covered in the event of a loss
• Relatively affordable

Cons:

• May not be necessary if you have a low deductible on your auto insurance policy
• May not be available for all vehicles
• May not be available in all states

Conclusion

AAA gap insurance can be a valuable addition to your auto insurance policy if you are upside down on your loan or lease, have a high deductible on your auto insurance policy, or are leasing a car. By providing coverage for the gap between your car's value and the amount you owe on it, AAA gap insurance can help you protect yourself from financial hardship in the event of a total loss or theft.

Additional Information

In addition to the information provided above, here are some additional things to keep in mind about AAA gap insurance:

• AAA gap insurance is not required by law, but it is highly recommended for anyone who is upside down on their loan or lease, has a high deductible on their auto insurance policy, or is leasing a car.
• AAA gap insurance is typically sold in conjunction with comprehensive and collision coverage. However, you may be able to purchase gap insurance as a stand-alone policy.
• AAA gap insurance is available for both new and used cars. However, the coverage limits may vary depending on the age and value of the car.
• AAA gap insurance is typically included in the cost of your AAA membership. However, you may be able to get a discount on your gap insurance premium if you are a AAA member.