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Overpaying on car insurance?

Overpaying on car insurance?

Overpaying on car insurance?

Your Guide to Navy Federal Gap Insurance

navy federal gap insurance
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For most people, a car is an expensive purchase and a big investment, especially a new model. If the vehicle is totaled, or suddenly loses its value in some other way, but you still have to pay the loan, GAP insurance can protect you. Navy Federal is a military and service member credit union and insurance provider that offers GAP coverage for its own auto loans. What’s more, they offer a low flat fee that could be better than local offers by other providers near you. Here’s the full explanation of Navy Federal GAP insurance.

What Is GAP Insurance?

GAP, referring to guaranteed asset protection, is an important type of optional car insurance coverage. If you buy a car with a loan and then lose it, like through theft, you still have to pay for the car loan. If your insurance policy can’t completely cover the remaining loan balance, you are left with a “gap.” In other words, you still have to make the remaining payments, even if the car is gone or worth far less.

GAP insurance pays this remaining balance for you. As an example, suppose you just bought a car for $40,000 and it got badly damaged in an accident, reducing its sale value to only $5,000. Your car insurance collision policy pays for its remaining market value, but you still have $35,000 of car loan balance. With proper GAP insurance coverage, you’d get the $35,000 you need to put your lost car’s loan to rest.

Although great for protecting a high-value car, this coverage can’t pay the cost of an extended warranty added to any car loans you have. GAP insurance also won’t work on vehicles that just need some maintenance or mechanical repairs.

How To Know If You Need GAP Insurance

In any situation where you are worried about your car losing a lot of its value, whether over a few years or in one incident, GAP coverage might be what saves the day. Some cases where you might want to get GAP coverage are:

  • Your car loan has a small down payment.
  • Your make and model depreciate faster than normal.
  • You put a lot of miles on your car every year.

You shouldn’t have to live in fear of an accident leaving you financially burdened. After GAP coverage frees you from your lost car’s loan balance, you can more easily afford to buy your next car. To ensure you’re covered sufficiently, you’ll benefit from shopping around for the best available GAP insurance provider in your area.

Most GAP insurance policies can also cover fire, floods, other weather and natural damage, and various little situations that could leave you without your car anymore. If you have reason to expect that these things might happen to your vehicle, you could ensure you’re covered in full by getting affordable GAP insurance combined with comprehensive coverage.

What Is Navy Federal Insurance?

Navy Federal Credit Union, or NFCU, is a credit union and insurance provider that serves active-duty personnel, reserve officers, officer candidates, and veterans of the armed forces, Department of Defense, or National Guard and their family members. If you or one of your family fits that criteria, you could have an opportunity to save on insurance with Navy Federal.

GAP insurance is available for new and existing Navy Federal auto loans. It will apply to a loan through Navy Federal on any car, truck, or SUV that is seven years old or newer. Commercial vehicles do not apply, including personal vehicles used for delivery or ride-sharing jobs. See the complete Navy Federal guide if you have more specific questions. Feel free to contact one of their agents, as they can answer questions about common cases, like refinancing with Navy Federal to get gap coverage.

How Affordable Is Navy Federal Gap Insurance?

Like many GAP insurance providers, Navy Federal does not calculate an annual premium and monthly payment based on factors like your driving record, age, and location. Instead, they charge a flat $399 enrollment fee that’s financed into your loan with them or paid as a lump sum. You won’t pay this again unless you get another GAP policy, and this applies to both new and current Navy Federal car loans.

You shouldn’t get GAP insurance from a dealership if you can avoid it, as they usually charge more than insurance companies. From major providers, GAP insurance usually costs between $400 and $700 as a one-time fee. Looking at that range, Navy Federal is extremely affordable. Most of their customers just add the fee to their loan, increasing the average monthly payment by a dollar or two.

Does Navy Federal Have Any Other Advantages for GAP Insurance?

In addition to paying off an outstanding loan gap on a lost car for however much your policy can cover, their GAP plans can also cover up to $1,000 of your insurance deductible. You read that right, Navy Federal is a provider that can pay for an insurance deductible.

For those still getting used to insurance, a deductible is a smaller portion of the expense that you’re required to pay first before the insurance company pays the rest. Lower-quality insurance plans will have higher deductibles than average, which can ruin the whole purpose of insurance coverage. You have far less chance of worrying about that with Navy Federal.

Navy Federal GAP Insurance: Key Takeaways

Navy Federal is a military-focused credit union and insurance company, so if you or a family member qualify, you can compare the Navy Federal cost of an auto loan and GAP policy with them against other options. Just remember, Navy Federal only offers GAP coverage on their own loans, not those of another lender.

A new car can cost you quite a lot, but protecting it shouldn’t. Members of the military or their families could save a lot with Navy Federal auto loans and GAP coverage. If you’re new to Navy Federal as a customer, their Car Buying Center helps show you how a car and coverage plan with them would look.

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

We’re here to help you simplify car care and save, so this post may contain affiliate links to help you do just that. If you click on a link and take action, we may earn a commission. However, the analysis and opinions expressed are our own.

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FIXD Research Team

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

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