GAP Insurance Inquiry
Unfortunately, my 2025 Honda Civic was stolen this morning, and I’m new to GAP insurance. Can someone explain how it works? I purchased the car just 9 days ago, and it only had around 286 miles on it. Also, I’m curious if this situation will impact my credit. I recently moved from the Philippines to the USA and I’ve learned that credit scores are very important here, which makes me a bit anxious. Thank you for any help!
I’m really sorry to hear that your Honda Civic was stolen; that must be incredibly stressful for you. GAP insurance, or Guaranteed Asset Protection insurance, is designed to help you cover the difference between what you owe on your car loan and the car’s actual cash value (ACV) at the time it’s stolen or totaled.
Since you just bought the car, it’s likely that the ACV will be lower than what you owe, especially with a new vehicle that depreciates quickly. GAP insurance helps cover that difference, so you won’t end up having to pay out of pocket for a vehicle you no longer have.
Regarding your credit score, the theft of your vehicle itself shouldn’t directly affect your credit. However, if you’re unable to make your auto loan payments due to the loss, that could potentially impact your credit score negatively. It’s a good idea to stay in touch with your lender about the situation and let them know what’s happening. They may be able to work with you during this time.
Make sure you report the theft to the police as well as your insurance company, as both will need to be involved in the process. If you have any further questions about handling the situation or managing your finances, feel free to ask. Wishing you the best of luck!