Getting Gap Insurance for a New or Leased Car

There are many people that don't know what gap insurance is. Many people don't realize how important gap insurance can be. Gap insurance is very important for some people, and if you don't have gap insurance you could lose a lot of money. This article will let you know if you are one of the people that could benefit from gap insurance, and what exactly it covers.

Gap insurance is for people who are leasing their car, or for people who make large down payments on new cars. Gap insurance covers the "gap" that your standard auto insurance would not cover. If your car is totaled, gap insurance will pay the difference between what your car is worth and what you owe the finance company.

Gap insurance is very important because when you first buy a car the value of the car starts to drop immediately. If you get an accident where your car is totaled, the insurance company will often pay you less than you owe to the finance company. This can be a huge amount, and depending on the price of your car the difference could be as much as $10,000. I know I don't have $10,000 extra dollars to give a finance company, especially with the economy these days.

I would never lease a car or buy a car with a large down payment without purchasing gap insurance. I feel gap insurance is something that everybody should know about and decide if it is right for them. If you have any questions about gap insurance be sure to ask your auto insurance agent if it would be right for you.