Your car will depreciate an average of 10% as soon as you drive it off the lot, but guess what wont depreciate? Your loan!
What happens if you crash it that day or even during that first year when it depreciates as much as 20%?
Who covers the GAP?
Hi guys! My name is Allana and today I would like to talk to you about GAP Insurance.
And no I’m not talking about the store and you don’t need to go to the mall for this.
Gap Insurance covers the difference between the actual cash value of your vehicle and what you still owe on your loan. If your car loan is greater than your vehicle’s ACV, make sure that you have GAP insurance in place.
MA automobile policies covers the actual cash value of your car, not replacement cost.
So if you get into an automobile accident you may find yourself owing a lot more on your car than it’s actually worth.
Say you owe the bank $30,000 on your car and a reckless driver completely totals that car.
Your insurance company will pay you the actual cash value of let’s just say $20,000.
And if you have Gap Insurance in place, it pays the $10,000 difference to your bank!
If you don’t have GAP Insurance in place, let’s just hope you have a savings account because accidents are not cheap guys!!!
This endorsement only costs an average of $30 added to your automobile policy per year.
Did you finance your car? If your car is deemed a total loss, your insurance policy might not pay off your car loan.