So, maybe you’ve bought a new car recently and were presented with the option of gap insurance. What is gap insurance? Gap insurance is a type of auto insurance that helps cover the difference between the amount you owe on your car loan and the actual cash value of your vehicle in the event of a total loss. It’s called “gap” insurance because it helps fill the “gap” between what you owe on your car loan and what your car is worth. Do Estero drivers need this kind of coverage on their vehicles? Keep reading to find out.
Do you really need gap insurance? What is gap insurance good for? Gap insurance can be particularly useful for Naples drivers who are financing a new or relatively new vehicle, as these cars tend to depreciate in value quickly. If you’re in an accident and your car is deemed a total loss, you’ll likely be required to pay off your car loan in full, even if the car’s value has dropped significantly since you first bought it. Gap insurance can help cover this difference and prevent you from being left with a large bill that you can’t afford to pay.
Gap insurance is also helpful for people who are making a small down payment on a car loan or who are leasing a vehicle. In these cases, you may not have much equity in the car, so a total loss could leave you with a large gap between what you owe and what the car is worth. Gap insurance can help protect you from having to pay this difference out of pocket.
Gap insurance doesn’t cover everything that might happen to your car, but will usually cover the following causes of damage when your vehicle is totaled:
We recommend gap insurance to Bonita Springs drivers when the following applies:
You don’t need to figure out the ins and outs of insurance on your own. Our finance department would be happy to walk you through your options. In the meantime, check out our other car-buying tips. We’re located conveniently near Fort Myers. So come in for a test drive or contact us today!
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