Gap Insurance Basics
When you purchase or lease a new car, you want it to have enough protection. Many people do not realize that their car’s value starts to depreciate as soon as it leaves the lot, often losing 20% of its purchase value within one year. Here is some information about how gap insurance can help with this and when it is a good idea to purchase gap insurance.
What is Gap Insurance?
Gap insurance is there to help you cover the gap between what a vehicle is worth and what you owe on it if something happens to your car. If you total your car, your standard auto insurance policy will cover the depreciated value (the current market value of the vehicle) regardless of what your car cost originally and what you still owe on it. Most auto insurance providers offer gap insurance for much less than the car dealers, often costing people only $20 more on their premium, which is not too bad.
When is Gap Insurance a good idea?
Buying gap insurance for your new vehicle is a good idea in a variety of scenarios, including:
If you made less than a 20% down payment.
If you financed your vehicle for 5 years or longer.
If you lease your current vehicle.
If the vehicle you purchased is known to depreciate faster than the average automobile.
If you rolled over any negative equity from your old car loan into the loan for your new car.
Contact Udell Family Insurance in Westlake Village for all of your auto insurance needs in California. Let us help you find the perfect policy to protect you on the road by giving your car the coverage it deserves.