If you’re in the position to buy a new or used vehicle, gap insurance is something no one will ask you about at the car dealership, but you should know about.
Let’s dive in!
How Does Gap Insurance Work?
In the event of a bad accident where your car is “totaled,” or where the cost to repair exceeds the value of the car at that point in time, gap insurance is what will cover the difference between what your car is worth and the amount you owe on it (if it’s financed). Most standard auto policies will pay for the current value of the car, but what if you’re a little “underwater” on the car loan.
When Gap Insurance Is Needed
It’s a good idea to consider buying gap insurance for your new car or truck purchase if you:
- Made less than a 20 percent down payment
- Financed for 60 months or longer
- Leased the vehicle (carrying gap insurance is generally required for a lease)
- Purchased a vehicle that depreciates faster than the average
- Rolled over negative equity from an old car loan into the new loan
Where to Ask For Gap Insurance
Most car insurers also offer it, and they typically charge less than the dealer. On most auto insurance policies, including gap insurance with collision and comprehensive coverage, adds as little as $20-$30 a year to the annual premium.
J. M. Whitney Insurance is an independent insurance agency located in Watertown, Massachusetts. Give us a call, stop by, or request a quote online to find out how much we can save you on your insurance.
If you liked this blog, stay tuned for more from J.M. Whitney Insurance!
Visit our social media pages for additional information and tips!
@jmwhitney on Facebook, Instagram, Twitter or LinkedIn