Honda Gap Insurance
When a new Honda buyer has the keys to their Civic, Accord, CRV, Odyssey or any other model, the next step will be to make sure the right insurance coverage is in place. One of the forms of insurance all Honda buyers should look at is gap insurance. To see if gap coverage makes sense we will look at specific examples as well steps to find the best company and pricing.
Why Honda Gap?
The basic insurance you will add to your new Honda vehicle will only cover you up to the market value of your Honda. This coverage is applied from the Collision and comprehensive protection less the size of the elected deductible. The problem gap insurance helps with is when your financing is more than the value of your Honda. The best use of gap is when you finance most of your purchase and the first couple years of your loan. The main culprit for gap being needed is the depreciation that takes place when you purchase your Honda as well as the first years of ownership. Below we look at specific examples to show how gap coverage for Honda can be beneficial.
How Much Risk do I Hold?
The best environment for Honda gap is when you are financing most of the purchase. The below goes over a situation where the total purchase cost, including sales tax and fess, is for $24,050.
The numbers show you can be at risk for $4,970 if you lost your Honda close to the purchase date. As loan payments are made the expected risk would come down to $2,486 after the first year. For years 3, 4 and 5 there is no risk and gap coverage will make little sense.
The next example shows how risk on a new Honda will change as the amount of financing drops to 90%.
The above numbers support a drop in risk where the potential loss when buying is $2,580 and drops to $516 at the end of the first year. The next set of numbers shows almost all risk Honda gap coverage can help against is eliminated when a new purchase is financed at 80%.
The above examples support that gap insurance will show the most value close to the purchase date and when little cash is put as a down payment. To follow more benefits visit our gap advantage page.
Honda Gap Companies
The most common place new Honda buyers will see the availability of gap insurance will be at the Honda Dealer. This insurance offered will be from Honda Finance. The pricing and terms can vary depending on the state you drive in, the model purchased and the dealer where you buy. Before signing up with Honda Finance it is wise to check with at least a couple other companies. To contact other gap providers visit our gap company summary page. Get multiple quotes will provide peace of mind you are receiving the best pricing from the company you are comfortable with.