{"id":606,"date":"2017-11-21T10:56:52","date_gmt":"2017-11-21T14:56:52","guid":{"rendered":"https:\/\/www.protectiveagency.com\/blog\/?p=606"},"modified":"2024-02-26T00:20:05","modified_gmt":"2024-02-26T04:20:05","slug":"what-is-gap-insurance-on-a-car","status":"publish","type":"post","link":"https:\/\/www.protectiveagency.com\/blog\/what-is-gap-insurance-on-a-car\/","title":{"rendered":"What Is Gap Insurance On a Car?"},"content":{"rendered":"

Buying a new or slightly used car can be an exciting time. Driving your new vehicle off the lot after negotiating and signing all the paperwork can feel like a major victory. Unfortunately, during all the excitement you may forget some of the smaller details of buying a car, like gap insurance.<\/p>\n

Gap insurance, like general auto insurance, is another way to cover your losses in case of an accident or theft of your vehicle. Insurance is purchased to be used in case of emergencies, which is why some people overlook this very important aspect of purchasing a vehicle.<\/p>\n

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What is Gap Insurance?<\/strong><\/p>\n

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Gap insurance is an insurance policy that covers the cost gap between what you paid for your vehicle and what its value is once you drive it off the lot. There are very few cars that increase in value over time; most often your vehicle will depreciate as soon as it becomes a used vehicle, even if it was new when you bought it.<\/p>\n

Let\u2019s put it this way: if you were to buy a new, expensive car, and that car was in an accident or stolen soon after it was bought, the money you still owe on the vehicle and the depreciated value of the car could be very different amounts. Without gap insurance, you\u2019d be stuck paying for the whole cost of your car, rather than its actual value.<\/p>\n

Your auto insurance typically covered the market value of your car, which is less than the amount you bought your vehicle for in the first place. Your regular auto insurance covers the total value of your car, which decreases right after you purchase a new or barely used vehicle. There is a time when the value of your car plateaus, and the gap becomes smaller as you\u2019ve paid off more of your car loan.<\/p>\n

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Do you need gap insurance?<\/strong><\/p>\n

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You might want to consider purchasing gap insurance on your car if:<\/p>\n

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