Any vehicle whether used or new loses around 25% of its actual value immediately after it gets out of the showroom, dealership or yard.
If you buy a car on some finance or credit and if it gets damaged beyond repair, gets stolen or is totaled, you are still accountable for your car payments. If you possess a comprehensive automobile insurance, then your insurance company is likely to cover the payments for your car at its present market price.
Here, the car dealer might expect you to pay the differential value between your car’s market value and its buying price. Usually, this amount is quite substantial ranging between $10,000 to $25,000. Paying such an amount is not an easy task especially it is going for a car that is damaged beyond repair or is stolen. At such times, GAP insurance comes into play and is very useful, as it covers this different value between your car’s purchase value and its current market value when it is being totaled.
In California, many auto insurance firms permit the buyers to obtain GAP insurance refund for cars that are as old as eight years, but no more than that. This is a real win-win situation for car owners as they can walk out from a totaled or stolen car without paying even paying a cent, but they can negotiate for a new loan for a new car.
GAP insurance refund in California is not a mandatory thing and automobile buyers can skip from it without disbursing for the cover. However, highways and roads in California are not that safe now and thus, it will be a wise thing to have a GAP insurance refund in California than regretting later.
GAP insurance in California is refundable. However, it depends on numerous factors. If you purchase a car having GAP insurance on finance or credit, then you can sell the car to some third party and may then claim for GAP insurance refund in California that you paid. It is imperative to keep in mind that all the paperwork pertaining to the car’s sale, insurance documents as well as other necessary papers need to be provided for obtaining GAP insurance refund in California.
In fact, one cannot guarantee for refund over refinance option and it depends on the dealer, your car purchase contract and the terms of GAP insurance. Thus, it is advisable to clarify these things beforehand.