Should I Choose Gap Insurance As Part Of An Affordable Car Insurance Package?
When people look for affordable car insurance, they usually search for standard coverage against damage to other people's vehicles and their own.
And while that's important to be sure, but have you ever considered gap insurance? This is probably a more important investment than you realize, protecting the full value of your car while you're still paying it off.
Gap Insurance: What Is It? When you purchase a car, its value goes down almost instantly.
This isn't usually a huge problem as long as you've already paid off the car.
However, if you purchased it on finance and still owe money, you could be left short in the event of an accident.
Gap insurance is designed to cover the gap between what your insurer will pay out on a totaled car, and what you still owe on finance.
Who Should And Shouldn't Buy Gap Insurance This type of insurance is recommended in two certain situations.
The first being for those who bought the car on finance, and still owe more money than the total the insurer would give for the value of the car NOW.
Secondly, if you're leasing a car you're often responsible for the full value should it be stolen or totaled.
Why is it so important in these two circumstances? Put simply, the gap can be quite big.
You could end up losing a lot of money that you can't afford to lose.
Gap insurance means you don't have to worry about taking such a big financial hit.
Even if you did purchase your vehicle on finance, you still might not need gap insurance.
For example, if your outstanding payments are relatively small, i.
e.
you owe less than the current value of your car, you don't need this insurance.
It's only necessary if your remaining payments are worth more than the total value your insurer would pay out.
How To Choose The Best Gap Insurance Coverage Just as with any affordable car insurance, it's important to research and read terms carefully when looking into gap insurance policies.
Specifically, it pays to look at the restrictions they may have on the vehicle's age, and the period in which you have to take out cover.
Some won't let you do so unless it's within the first few weeks of buying your car.
It's well worth taking this time to research, however, as it can save you a lot of cash!
And while that's important to be sure, but have you ever considered gap insurance? This is probably a more important investment than you realize, protecting the full value of your car while you're still paying it off.
Gap Insurance: What Is It? When you purchase a car, its value goes down almost instantly.
This isn't usually a huge problem as long as you've already paid off the car.
However, if you purchased it on finance and still owe money, you could be left short in the event of an accident.
Gap insurance is designed to cover the gap between what your insurer will pay out on a totaled car, and what you still owe on finance.
Who Should And Shouldn't Buy Gap Insurance This type of insurance is recommended in two certain situations.
The first being for those who bought the car on finance, and still owe more money than the total the insurer would give for the value of the car NOW.
Secondly, if you're leasing a car you're often responsible for the full value should it be stolen or totaled.
Why is it so important in these two circumstances? Put simply, the gap can be quite big.
You could end up losing a lot of money that you can't afford to lose.
Gap insurance means you don't have to worry about taking such a big financial hit.
Even if you did purchase your vehicle on finance, you still might not need gap insurance.
For example, if your outstanding payments are relatively small, i.
e.
you owe less than the current value of your car, you don't need this insurance.
It's only necessary if your remaining payments are worth more than the total value your insurer would pay out.
How To Choose The Best Gap Insurance Coverage Just as with any affordable car insurance, it's important to research and read terms carefully when looking into gap insurance policies.
Specifically, it pays to look at the restrictions they may have on the vehicle's age, and the period in which you have to take out cover.
Some won't let you do so unless it's within the first few weeks of buying your car.
It's well worth taking this time to research, however, as it can save you a lot of cash!
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