Who Needs Car Gap Insurance?

Did the Dealer Try to Sell You Auto Gap Insurance?

Lots of of us could use car gap insurance at some point. If you're upside down on your loan, you regular insurance policy probably only covers the damage on your car up to the book value. As you know, your car loses 20% of its value the minute you drive it off the lot. Furthermore, lots of us are rolling over our trade in loan into a new car loan. These fact make it easy to owe more on our cars than they are valued for.

Hey, don't feel bad. To me, a car is worth what it's worth. i.e. it is worth the value of the transportation it provides. Besides if you spend too much time worrying about owing more than the value you can go nuts!

Anyay, dealers sell a product called Auto Gap Insurance which picks up where your regular comprehensive insurance leaves off. Lets say you bought a car for $20,000. You totalled your car 12 weeks later, but now the book value is only $16,000 - because techincally it is used. You still owe $20,000. That's where gap insurance comes in. It ill pick up the other $4,000.

Dealers tend to charge $700 or more for this protection, but you can purchase Gap Insurance Online Direct. Learn About Buying Car Insurance Direct For Less.

Your other option is to find a comprehensive car insurance policy that will cover the finance amount of your car. Compare comprehensive car insurance here.