When people buy a new car, often they are not thinking very far down the road in terms of safety. If they’re in an accident, they expect their insurance company to pay for it. Often times, this is not exactly what happens. Instead, the insurance company pays for part of the claim, and you’re left paying for the rest. This is especially troubling if you are no longer driving this car. Then you’re stuck paying for a car you’re no longer driving.
Gap insurance can save you this hassle. The idea of Gap insurance is that if you are in an accident and your car is totaled, your real car insurance will pay for their part. Then, whatever is left over will be paid off by the gap insurance. This insures that you do not have to pay anything for the car you are no longer driving.
When you drive a new car off of the lot, it automatically depreciates in value. The value of the car is what the insurance companies use when deciding how much to pay in damages. This is why many insurance companies will not pay the full cost of damages on your totaled car. While this doesn’t seem fair, it’s a practice that happens a lot throughout the country each year. People that did not invest in Gap insurance are left to pay off their dead car, while paying off a new car in the process. It’s a hole that many people can’t seem to dig themselves out of.
Gap insurance is reasonably priced, but it is best gotten from your bank or credit union. If this is not possible, it is usually available through different dealerships. Out of all the extra things to invest in when buying a car, this may be one of the most important.
Whether the car you are buying is new or used, Gap insurance can save you a lot of time and money. Don’t let the car insurance company get away with not paying off the original value of the car. Trust me, most companies practice this and can easily get away with it. If you want to save yourself the hassle, get Gap insurance. It may not seem important now, but if you ever total your car, you’ll regret not having it. Ask your bank about Gap insurance, before it’s too late and you’re in the hole with a broken car.
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1 users resposed " Gap Insurance – A Great Investment "
August 20 2009
We decided to get gap when we purchased my wife’s new car because the purchase value was significant, and the drive-off-lot value was quite a bit less.
I would imagine that if you buy a 1-2 year old used car and put some money down up front, you can probably do away with gap insurance.
I think it was about $25/month in our case.
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