Auto Gap Insurance

If you're familiar with the concept of "fair marketvalue and the amount of your loan that remains is
value," you'll know that as soon as your new vehiclemore approximately equal.The good thing about gap
leaves the car lot, it depreciates in value by up toinsurance is how reasonable it is to purchase. At only
twenty percent. What you may not know is that ifa few dollars a month, it can fit the budget of most
your new car gets stolen or totaled within the firstnew car owners. What stops people from purchasing
year that you have it, you're still going to end upgap insurance isn't usually the cost of the coverage,
paying a large portion of your loan, even if you havebut 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 betweenthey do offer gap insurance at the time that you
what your insurance company says the car is worthbuy your car, you can often find a better rate on
(the fair market value) and how much you owe onyour own.One of the reasons car buyers aren't
it..There are many situations that encourage thefamiliar with gap insurance is that it isn't offered in all
purchase of auto gap insurance. It is often a requiredstates. In fact, it isn't even offered by some
addition to a lease contract, as the leasing companyinsurance companies. Connecticut, Louisiana, Maine,
must be guaranteed compensation should theirNebraska, New Hampshire, New Mexico, New York,
vehicle be stolen or involved in an accident. You'll alsoVirginia 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 aencourage lawmakers to make it available. Similarly,
thief's eyes are also the most popular models sold. Ifthose who now have an auto policy through a
thieves steal your vehicle, even if it's the night youcompany that doesn't offer gap coverage can
get it, your insurance will only pay for the value ofrequest that their carrier add gap insurance as an
the car, and you'll be left paying on a loan that you'reoption.If you own an older vehicle and don't anticipate
not benefiting from.Although many dealers will claimbuying a new one anytime soon, it is probable that
that you can only purchase gap insurance throughyou will never need to know what gap insurance .
them at the time of the purchase, in fact you canBut for those of you who are ever planning to buy a
enroll in gap insurance anytime within the first twelvenew vehicle that might require financing, gap
months of your purchase. Of course, the longer youinsurance can be an indispensable--and
wait to enroll, the less cause you have for it. Afteraffordable--alternative to paying out-of-pocket for an
the first few years that you've owned your car, youaccident or theft that isn't your fault.
will no longer need gap insurance, since the car's real