Auto gap insurance is a term not many people are familiar with. But if you are shopping for a new or almost new car you should make sure you have it to protect yourself financially. First let me quickly explain what this insurance is, how it can help you and how to avoid getting slapped by it.
First, when you are shopping for the best new car insurance rate, make sure you add in the cost of gap insurance, especially if you have an expensive car. It is like added protection from financial loss. Auto gap insurance is also a must have if you plan to lease a car. In fact, it is often a requirement stated as a part of your lease contract. To give you the most simple explanation possible, auto gap insurance covers you where your primary insurance does not.
It covers you for the difference or auto insurance gap between what your primary insurance coverage will pay and what you owe the bank or finance company on your car in case of a total loss. For example, if someone steals your car and it’s never recovered or if it is totaled and your insurance will only pay you up to what the car is worth $20,000 - but you still owe 24,000. Gap insurance will pay the $4000 difference.
Because of car depreciation, for example the average new auto depreciates 10-20 percent the minute you drive it off the lot, that’s what makes gap insurance necessary in most of these cases. Why? Because often your primary insurance will pay only what the car is worth at the time of the accident. Auto gap insurance will make up the amount should you owe more than the car is worth. That is why buying gap insurance is wise choice if you lease a car or put down a small down payment.
Although it is usually required if you lease a vehicle, you should still shop around for the best price. You may find you could save a significant amount of money by comparison shopping. Resist the temptation to accept the first offer that is thrown at you.
Check your primary insurance policy and see if it is written to pay the full amount of your car loan. If it does then you do not need auto gap insurance. Be sure to check with your auto insurance agent if you have any further question about automobile gap insurance.
Roy Primm has written dozens of articles showing others the latest tips to saving money on their auto insurance. Check his tips out before you get your next quote at … Car Online Insurance