If your $40,000 car is totaled three months later, your insurance company might only pay out $34,000. If you still owe $38,000 to the bank, you are on the hook for that $4,000 difference. GAP insurance steps in to pay that bill. When You Should Buy It
Should You Buy GAP Insurance on a New Car? You just drove your shiny new car off the lot. You’re thrilled with the tech, the smell, and the smooth ride. But then a thought hits you: what happens if this car gets totaled tomorrow? should you buy gap insurance on new car
GAP insurance isn't necessary for everyone, but it is a lifesaver in these specific scenarios: If your $40,000 car is totaled three months
Instead, call your current auto insurance provider. Adding GAP coverage to your existing policy usually costs only . It’s the exact same protection for a fraction of the price. The Bottom Line When You Should Buy It Should You Buy
Standard auto insurance covers the "actual cash value" of your car. The problem? New cars lose value the second they leave the dealership. This creates a "gap" between what you owe the bank and what the car is actually worth.