Company cars were bought with huge sums of money because it has a specific role to play in making one’s business progress. It is therefore very important to protect the cash which was pumped into purchasing such assets a reason you need a GAP insurance policy.
What is GAP Insurance?
GAP simply means Guaranteed Asset Protection insurance.
This insurance’s main work is to pay the difference between the amount allowed for the total loss of your new or used car and the balance on your loan or lease. A comprehensive insurance payout will only be for the current market which could leave the business short by thousands of dollars due to depreciation, which can be as high as 77% after three years of ownership.
This will aid you to make an arrangement for a new vehicle so that your day-to-day operation does not get to suffer.
This will allow you to quickly arrange a replacement vehicle so that your daily operation does not suffer.
When to consider buying GAP Insurance:
You can consider the Guaranteed Asset Protection insurance once you understand that you wouldn’t get the actual value of your company car from the original insurer. It becomes worthy to subscribe to if your company car is leased or you as the owner have an outstanding debt or loan to pay.
In a bad situation where you lose your car due to an accident or any other damage and you think the value of the car has dropped, there would be a difference between what you would get or receive from your insurance claim and the remaining amount of your payments for the car.
That is to say, you will definitely end up paying more for a car that is not at the moment on the road.
Why is it Smart for Businesses:
Guaranteed Asset Protection insurance is a very smart investment for all motorists but businesses do make the best use of it. Why? This is so because business cars do hit more on roads than motorists thereby making their chances of getting involved in accidents high.
In our current world, the best drivers no matter how careful they are still do find themselves in accidents which may cause their employer’s car or theirs to be declared as a total loss.
This is particularly true in older cars which can be written off over minor damage. In addition to collisions, a vehicle is also declared a total loss if damaged by fire or stolen and never recovered. Car crime is a big problem and criminals may target company cars if they are high-value.
Before you subscribe to the Guaranteed Asset Protection insurance, you have to put into consideration the frequency of the usage of the car, the potential accumulated mileage well as nature of work, etc.
Although though an accurate estimate could be hard to come by, with one having a general idea, he or she is expected to have an easier decision-making process.
Peace of Mind:
Definitely, as a business owner, you would have total peace of mind once you know your vehicles are insured under GAP. If your vehicle is to be written off frequently due to depreciation, it could cost your company some huge amount of cash or Dollars.
GAP insurance will allow you to rest assured knowing that your company finances will not be impacted if something were to happen to the automobile. If not, it would be your sole responsibility to raise the cash for any shortfall and it could result in a huge headache if your company is new in the market and the cash flow is a bit less.
If you have a car or fleet of cars as a business owner, the smart thing to do is to have GAP insurance. It aids you to have your investment fully covered and protected having in mind that you have escaped the payment of huge sums of money should your car be written off due to any misfortune.
As an investor, you need to make the best and most informed decisions.
You can also read about the 5 important Insurance policies everyone should have.