| If you're familiar with the concept of "fair market | | | | value and the amount of your loan that remains is |
| value," you'll know that as soon as your new vehicle | | | | more approximately equal.The good thing about gap |
| leaves the car lot, it depreciates in value by up to | | | | insurance is how reasonable it is to purchase. At only |
| twenty percent. What you may not know is that if | | | | a few dollars a month, it can fit the budget of most |
| your new car gets stolen or totaled within the first | | | | new car owners. What stops people from purchasing |
| year that you have it, you're still going to end up | | | | gap insurance isn't usually the cost of the coverage, |
| paying a large portion of your loan, even if you have | | | | but their relative ignorance that it even exists. Loan |
| comprehensive auto insurance. Auto "Gap" insurance, | | | | companies won't tell you about it, nor will car dealers. |
| originally known as "guaranteed asset protection" | | | | They are guaranteed their money regardless. And if |
| insurance, is meant to insure the difference between | | | | they do offer gap insurance at the time that you |
| what your insurance company says the car is worth | | | | buy your car, you can often find a better rate on |
| (the fair market value) and how much you owe on | | | | your own.One of the reasons car buyers aren't |
| it..There are many situations that encourage the | | | | familiar with gap insurance is that it isn't offered in all |
| purchase of auto gap insurance. It is often a required | | | | states. In fact, it isn't even offered by some |
| addition to a lease contract, as the leasing company | | | | insurance companies. Connecticut, Louisiana, Maine, |
| must be guaranteed compensation should their | | | | Nebraska, New Hampshire, New Mexico, New York, |
| vehicle be stolen or involved in an accident. You'll also | | | | Virginia and Washington are states that don't offer |
| want to have it if you're getting a new vehicle, | | | | gap insurance, although drivers in those states can |
| especially one that is at risk for being stolen. | | | | petition the state Insurance department in order to |
| Coincidentally, the most popular automobiles in a | | | | encourage lawmakers to make it available. Similarly, |
| thief's eyes are also the most popular models sold. If | | | | those who now have an auto policy through a |
| thieves steal your vehicle, even if it's the night you | | | | company that doesn't offer gap coverage can |
| get it, your insurance will only pay for the value of | | | | request that their carrier add gap insurance as an |
| the car, and you'll be left paying on a loan that you're | | | | option.If you own an older vehicle and don't anticipate |
| not benefiting from.Although many dealers will claim | | | | buying a new one anytime soon, it is probable that |
| that you can only purchase gap insurance through | | | | you will never need to know what gap insurance . |
| them at the time of the purchase, in fact you can | | | | But for those of you who are ever planning to buy a |
| enroll in gap insurance anytime within the first twelve | | | | new vehicle that might require financing, gap |
| months of your purchase. Of course, the longer you | | | | insurance can be an indispensable--and |
| wait to enroll, the less cause you have for it. After | | | | affordable--alternative to paying out-of-pocket for an |
| the first few years that you've owned your car, you | | | | accident or theft that isn't your fault. |
| will no longer need gap insurance, since the car's real | | | | |