Is Buying Gap Insurance the Right Move for You?
When you’re looking for cars for sale near Lexington, KY like the ones we have in our inventory, you may hear people talk about gap insurance. While you may be tempted to tune out those discussions because you already have car insurance, you might want to pay attention to what’s being said. That’s because gap insurance is different than your standard auto insurance.
As you probably know, your standard car insurance policy will reimburse you for the current value of your vehicle if your car is stolen and remains missing or your automobile is destroyed. The problem some drivers face is that the fair market value of their car may be less than what they owe on their auto loan.
The purpose of gap insurance is to pay the difference between the market value of your vehicle and what you owe your lender. Unless your loan balance exceeds the limits in your gap insurance policy, this type of coverage can prevent you from having to pay anything out of pocket if your automobile is stolen or totaled.
If you visit our Honda dealership in Richmond, KY, we’ll explain that purchasing gap insurance is the right move for some drivers but not others. Drivers who don’t have car loans and motorists who only have a small balance on their current auto loan don’t need gap insurance.
Motorists who put very little down when they bought their vehicle and people who leased their automobile may want to buy gap insurance. Individuals who bought a vehicle that will depreciate fast might want to purchase gap insurance, too. If your car loan will last five years or longer, it’s often a good idea to get gap insurance.
To learn more about when it’s a smart move to get gap insurance and when it’s a good idea to go without this coverage, contact Gates Honda today.