Getting GAP coverage and why you should do it

GAP coverage may seem like one of those extra options that salesman throw at you when you decide to purchase a car from them. However, this coverage is one option that you should not skimp on.

GAP insurance cover can be simplified as covering the "gap" in the event of your new vehicle being totaled. Let's say your auto insurance will cover 20,000.00 for your car but you owe 23,000.00 on the said vehicle (because you purchased new and the car has depreciated in value). GAP insurance covers the additional 3,000.00.

Without this coverage, more than likely the average person would have to add the uncovered 3,000.00 to their next car loan. This is where getting "upside down" in a car loan begins. It's a vicious term that no car owner should experience. Being upside down (yes, it's a real term!), on your car loan means your loan is significantly more than the cash value of the vehicle.
Categories: Finance

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