New Car? Make Sure You Have Gap car insurance
Have you just bought a new car? What if an accident occurred soon after taking your brand new ride off the lot? You have full car insurance coverage, right? So, you're covered... aren’t you?
When you drive your new car off the lot the value of your vehicle plummets, sometimes as much as 20%-30%. If you paid $25,000 for your new vehicle and have an accident a month later, you probably have only made at the most one car insurance payment and if you did not put any money down, your loan amount is still close to the $25,000 purchase price.
Unfortunately, even with full coverage, which includes comprehensive and collision car insurance, you will only receive the market value of your vehicle which could be as much as 20%-30% lower than the purchase price. That means you may be stuck paying that 20%-30%. On a $25,000 car, just a 20% depreciation would be $5,000!
GAP stands for Guaranteed Auto Protection. Most people just use the term GAP to represent the gap in coverage between how much one owes on a car and how much the car is worth. GAP car insurance is necessary and is relatively cheap. GAP car insurance is a must if you are buying or leasing a new vehicle and should not be something that you decide to skip.