Honda Finance 101: 3 Things Gap Insurance Won’t Cover

Gap insurance can be a useful type of insurance coverage, especially when you’ve taken out a loan from the Honda finance department here at Pacific Honda. However, sometimes there’s confusion about this coverage and what exactly it can do for drivers. Let’s look at some things that GAP insurance does not cover.

Damage to Other People and Their Property

If you crash your car and damage somebody’s property or injure them, that is not covered by gap insurance. In California, this would be covered by your liability insurance, a type of coverage that’s mandatory for all drivers to carry.

The Cost of a Brand-New Vehicle

Gap insurance is not designed to pay for an entirely new Honda vehicle, even if your current car gets totaled or stolen. Gap insurance coverage has a niche purpose and pays out only a certain amount in these situations.

Normally, if you owe more on your loan than the car is worth, you can end up on the hook for thousands of dollars when your car is totaled. If you owe $20,000 and your car is only appraised to be worth $18,000, then you have to find that $2,000 yourself. This type of insurance covers that “gap” and pays out the difference between what your car is worth and your outstanding loan balance.

Repairs or Replacement Parts

Your gap insurance is not meant to help you pay for repairs or maintenance on your new Honda vehicle. If you damage your vehicle, this type of coverage does not help you, and it does not cover oil changes or filter replacements, either.

Essentially, if you require repairs or any other kind of Honda service, you’re likely paying out of pocket unless it’s work covered by a warranty.

Talk to Our Honda Finance Experts in San Diego, CA

If you’re interested in financing a new car, truck, or SUV, visit our Honda dealership in San Diego, CA. We can help you find the right Honda vehicle and the right loan.