What is Gap Insurance and Should I Have It?
As anyone who leases or finances a car knows, once you leave the car lot the value of your automobile drastically decreases.
The value of your car is important as you must understand that an insurance company looks to the value of your car and not the value of your car loan when replacing your vehicle.
So say, for example, you finance a vehicle for $20,000 dollars. Once you leave the lot and over time, the car depreciates in value. At the time of your car accident, your vehicle may be only worth $11,000 dollars but you may still owe another $4,000 dollar in financing equaling $15,000 dollars. In the event your car accident is so severe that the insurance company needs to replace your car, they will only be covering the $11,000 dollars for the value of your car and you’re stuck with the remaining financing costs. To help alleviate that difference in amounts, you can choose to purchase gap insurance. It’s basically as easy as the name, the insurance will help cover the gap between your car value and the financing costs still due on the automobile. Watch the video now to learn more.
To learn more about personal injury law, I encourage you to watch the video above. If you have legal questions, I want you to call me at (855) 880-8163. I welcome your call.
Kalfus & Nachman