If you buy or lease a new vehicle and don’t have gap coverage, you should probably look into it. No one wants to increase costs when they compare car insurance, but gap coverage can be important according to Russ Heaps of Bankrate Inc. Car gap insurance covers the difference between what you owe on your car and it’s cash value. If you drive off of the lot with a new vehicle and total it or your new car gets stolen the first night you have it home, without car gap insurance you’ll have to pay the difference between what insurance covers and what you owe. Standard car insurance pays your lender an amount equal to your car’s current cash value. Since the value of cars depreciates rapidly in the first few years, unless you paid a large down payment you are likely to owe your lender more than your car’s cash value.
There are six groups of people that would benefit from car gap insurance from a company like Infinity Auto Insurance. Those who lease their cars, get a loan for 60 months or more, do not put at least 20 percent down, drive over 15,000 miles per year, roll any negative equity into their new car loan, or get a vehicle with traditionally high rates of depreciation should definitely look into this type of insurance. Most insurers offer car gap insurance and the cost is relatively low. It is smart to ask your insurance company if they offer gap coverage rather than buying it from a car dealership because the cost can be much higher at a dealership. On an average premium payment, gap coverage might add $20 to $30 per year to your premium. That will save you a lot of money if your new car is totaled or stolen and you end up owing $10,000 more than insurance covers though.
