GAP Insurance

 
  1. Gap Insurance

     

    Most drivers aren't worried about their insurance. In most accidents, only some cosmetic damages occur or a few repairs are needed, and insurance can easily cover those issues. Many people aren't considering the possibility of a total loss, especially if it's a brand new car. However, this is something that happens. Don't be that person who thinks, "That won't happen to me." Be prepared with Gap insurance.

     

    Let's say that you experience a total loss. You bought a brand new car for $30,000, put down $1,000 upfront, and drove off the lot with a $29,000 loan. A few months later, your car gets absolutely totaled -- irreparable damage. Your insurance covers $26,000 of the total cost of your vehicle, but where is the leftover $2,000 going to come from? Out of your pocket? That's a lot of money to pay when you don't even have a car to show for it.

     

    Gap insurance is optional but invaluable coverage, which can be added to your auto insurance. What does it do? The answer lies in the name. Gap insurance covers the gap between what you owe on your car and its value at the time of the accident. While many people choose not to go with this option, gap insurance is incredibly helpful in the rare occasion of a total loss.

     

    Depreciation occurs the most within the first three years of owning a vehicle, and a brand new car will begin losing value the moment you drive off the lot. If your new car is damaged beyond repair, it's likely your insurance will only cover the value of your vehicle at the time of the accident. Gap insurance is a worthy investment because it will cover the disparity between how much you owe on your vehicle and how much the value has dropped. Be prepared for anything by choosing gap insurance.


If you have any finance related questions or concerns, please stop by Royal Moore Nissan today so we can answer everything for you.