Did you know that Auto Insurance policies pay only the Actual Cash Value (ACV) of your vehicle at the time of loss? Have you recently purchased a new or used vehicle, or have you recently refinanced a car loan? If so, be sure the value of the loan isn’t higher than the actual cash value of the vehicle.
Gap insurance can provide the additional coverage required to pay the loan off in full should a total loss take place. Protect your financial future by answering a few questions.
Have you recently purchased or leased a car with little or nothing down? If so, you might owe more than the car is worth. Gap insurance may prove to be a good way to protect your investment and allow you to make a fresh start in the event of a major accident or other covered loss.
Are you able to pay the difference between the current loan and actual cash value of the car – plus deductibles and co-payments – out of pocket? If not, gap insurance might be a good investment. For a fraction of the cost required to set aside funds required to pay off the balance of a car loan plus other out-of-pocket expenses, auto gap insurance reduces the risk associated with rapid depreciation.
What is the actual cash value of your auto? Determine your vehicle’s current value (Actual Cash Value), then compare it to the current outstanding loan or lease balance. Most people find gap insurance an essential yet affordable part of their financial planning. You can estimate your vehicles value at kbb.com or nada.com