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Gap Insurance: What is It? Why do You Need It?

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When you buy a new car—or even a slightly used car—know that, unfortunately, you are making a terrible financial investment decision. You will lose money the moment that car leaves the lot. In fact, statistically, you are going to lose fifteen- to twenty-percent the moment you sign the papers and leave the lot. But that doesn’t mean that you shouldn’t purchase a new car. In fact, some things have value above and beyond making an investment. But if you do choose to purchase, or lease, a new vehicle you might want to consider gap insurance. Here’s why…

Gap insurance covers the gap between what your car is worth—actual value—and the amount of your car loan or lease buyout (the lease program with most car companies is becoming an ever more popular option with today’s car buyer). There’s almost always going to be a considerable gap between those two numbers. That gap means that if you were to be in an accident with your new vehicle, your insurance company would only pay out the dollar amount associated with the vehicle’s actual value. But, gap insurance makes sure that you don’t have to pay the financial gap out of pocket. Imagine owing five-thousand on your new car and you don’t have it!

Insider Information on Gap Insurance…

When you purchase or lease your new vehicle, the dealership, in all likelihood (all dealerships operate differently) will attempt to sell you on gap insurance and the cost of the insurance could be four to five times as much as it would be as an add on to your vehicle’s insurance policy. That’s considerable when you consider the cost of your vehicle and insurance.

If you have any questions about vehicle insurance, or how an add on such as gap insurance can protect your vehicle investment for the years to come. then call today to see the difference of having a quality insurance policy built by the insurance professionals at Frontier Insurance can have on your life.

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