Can Gap Insurance Help Me?

 

Supplemental car insurance plans can be a real lifesaver if that worst-case-scenario happens and your beloved car is totaled. Let the professionals at Brunswick Auto Mart tell you more about gap insurance today.

Gap (Guaranteed Auto Protection) insurance covers the difference between the actual value of your car and the balance you still owe on the loan. Believe it or not, many insurance policies will only reimburse you and your financial institution with the amount needed to replace the vehicle with one of the same value (minus your deductible). Many don’t always cover whatever else you may still owe to the bank on top of the vehicle’s actual value.

So, for example, if you pay only a small down payment and choose a payment plan of five years or more, that's quite a while where you owe the bank more than what your vehicle is currently worth. Taking into account interest, taxes, and how quickly cars depreciate, this isn’t uncommon, and you’re still on the hook for the whole amount even if the car is not driveable anymore.

This is where gap insurance comes into play. If you opt for this coverage, it will cover the “gap” between what your vehicle is worth and what you still owe as part of the loan. It's almost always required if you lease the vehicle as well.

We hope this information has helped, and that you’re more comfortable with understanding what it is and if it applies to your unique situation. For more information, don't hesitate to reach out to our Chrysler car dealers near Akron, OH, who are always ready to take on any follow-up questions you may have. Come see us today!

Categories: Finance, News
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