Gap Insurance Refunds
When you decide to purchase a vehicle with Cactus Jack's Auto, you have the option of selecting gap insurance coverage along with your requiredliability coverage. Did you know that if you pay your car loan off early, there is a chance that you will be able to enjoy a little extra money in your pocket? How is this possible?
While a refund is not available for the required liability coverage, a gap insurance refund is possible. How does a gap insurance refund work? Cactus Jack's Auto explains the process below.
What is Gap Insurance?
When you drive your vehicle off of the lot after purchase, your vehicle begins to depreciate. Because of this there may be a period of time where you owe more on your loan than the vehicle is worth. If you experience an accident during that time where the car is totalled, a traditional insurance company will only pay out on what the car is worth. If you owe more on the loan than the value of your vehicle, you will end up having to continue paying on a car that you are unable to drive. The purpose of gap insurance is to cover that gap between the cash value traditional insurance pays out and the amount owed on the loan.
How Does a Gap Insurance Refund Work?
While you won’t receive a refund in full after the car is paid off, there is a chance that you can get back a portion of what you paid for this coverage. Here is how it works:
- Lump Sum Payment: If you pay off the gap insurance refund policy in advance, you can receive a refund on the unused portion.
- Monthly Payments: If you pay your premiums monthly, you will not be refunded for past payments. If you cancel coverage early in the month, you may be entitled to a small refund.
How Do I Cancel Gap Insurance?
Obtaining a gap insurance refund is quite simple, however you need to have the right paperwork on hand. To begin the cancellation process, be ready to submit the following items when you contact your insurance provider:
- Gap insurance cancelation forms
- Copy of an odometer disclosure statement
- Copy of auto loan payoff showing the date your vehicle was paid off
Cactus Jack's Auto Makes Financing Hassle-Free
At Cactus Jack's Auto, it is our goal to make the process of financing your vehicle a stress-free experience. If you have any questions about financing or your insurance options, do not hesitate to reach out to the team at Cactus Jack's Auto.