When you purchase a new car, especially if it’s financed or leased, you may hear about gap insurance as an optional add-on to your auto policy. While it’s not required, gap insurance can be a lifesaver in certain situations. Understanding how it works and when it’s worth considering can help you make the best decision for your financial security.
What Does Gap Insurance Cover?
Gap insurance is designed to cover the difference between what you owe on your car loan or lease and the actual cash value of your vehicle. If your car is totaled or stolen, your standard auto insurance policy will only pay the current market value of the car, which may be less than what you still owe. Gap insurance steps in to cover that “gap,” ensuring you’re not stuck paying out of pocket for a car you no longer have.
When Should You Consider Gap Insurance?
Gap insurance is most beneficial for drivers who are financing or leasing a vehicle. If you made a small down payment or have a long loan term, your car’s value may depreciate faster than you can pay off the loan. In these cases, gap insurance can protect you from financial loss. It’s also a smart option for drivers who purchase new cars that tend to lose value quickly.
How to Add Gap Insurance to Your Policy
At Lakefront Insurance Agency, we help drivers in Osage City, KS, explore their auto insurance options, including gap insurance. Our team can guide you through the process and help you decide if this coverage is right for your situation. Visit Lakefront Insurance Agency to learn more about gap insurance and how it can protect your finances.
Protect Your Investment
Gap insurance isn’t for everyone, but it can be a valuable tool for drivers with financed or leased vehicles. Contact Lakefront Insurance Agency in Osage City, KS, today to discuss your auto insurance needs and find the right coverage for your car.
