Understand Car Gap Insurance

Part of buying new car or truck ensure that you. Have the appropriate insurance for your new car Regardless of what your normal car insurance covers when you buy new car, you should additional Gap insurance considering buying. To help you understand how Gap Insurance works, read scenario in the steps described.

finalize sales campaign on the new vehicle. For the sake of explanation, tell paid $ 38,000 for new vehicle. Set payment of $ 3,500 to make amount you financed or what you still owe his $ 34,500.00.

Understand Car Gap Insurance

Drive your new vehicle off dealer’s lot and down street. In your mind, you think that you just made $3,500 in equity in your car. However, in reality, minute you drove your car off dealer’s lot, value of your car decreased, meaning it went down in value.

So, in just few minutes time, your $38,000 auto is only actually worth $32,000 according to Kelly Blue Book or other vehicle evaluation methods. This means that you are what some car dealers refer to being upside down on your car. You owe $2,500 more than what value is now declared to be.

Think what would happen if you did not have Gap Insurance on your new auto if you were suddenly in accident, just down street after signing papers on your new vehicle. You would think that your insurance would pay you what you just paid for your car, so you can pay off loan you just took out, recoup your down payment and start over with another new car. Actually, if you had proper coverage, insurance company would probably just pay Kelly Blue Book value, which would be about $32,000, less deductible of anywhere from $500 to $2,500.

So, you would be out car and still owe on car loan that you are legally obligated to pay off. Make that very important call to your insurance company for auto Gap Insurance before you drive your car off dealer’s lot. This would make your scenario go much differently.

You would still be very upset about your accident and providing that accident was fault of other driver, you would have security of needed additional Gap Insurance. Gap Insurance would most likely pay you for your additional losses of difference between sales price of $38,000 and Kelly Blue Book value or equivalent, which could be around $32,000. This amount would be $6,000 or gap between sales price and actual value of vehicle.

Some Gap Insurance policies will even pay for your insurance deductibles. Consider other scenarios that Gap Insurance coverage could come in handy such as tornados, hurricanes, fire, vandalism or theft.

We hope this information about “How to Understand Car Gap Insurance” is really helpful to you as well as other information related to Insurance

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How to Understand Car Gap Insurance

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