Do You Need Gap Insurance?
Shopping for a vehicle is exciting, isn’t it? It’s fun to see different cars and test drive them. It’s equally enjoyable to meet new people as you’re shopping. While there’s little doubt that shopping for an automobile is fun, the car buying process includes some decisions that can be difficult to make.
One decision you’ll need to make is whether you should buy gap insurance. Gap insurance is a type of coverage that differs from your “standard” car insurance policy. If your vehicle is destroyed or stolen and still missing, your standard policy will only reimburse you up to the current market value of your automobile. That can be a problem if you owe a lender more than what your vehicle is worth.
As its name implies, gap insurance is meant to cover the gap or the difference between the balance on your auto loan and what your standard insurance pays out. Even though a gap insurance policy may pay out tens of thousands of dollars, this kind of coverage typically has a modest premium.
If you lease a car, getting gap insurance is often a requirement. Whether you buy a new luxury automobile or one of the vehicles in our used Mercedes-Benz car inventory, you may want to get gap insurance even if your lender doesn’t require you to do so.
In general, it’s wise to purchase gap insurance if you’re going to buy a vehicle and put down less than 20%, you rolled negative equity into your current car loan, or your automobile will depreciate especially fast. When you visit our Van Nuys, CA Mercedes-Benz dealership, we’ll tell you that getting this coverage is also advisable if you financed your car for 60 months or longer.
To learn more about gap insurance and find a luxury car you’ll love, head over to Keyes European now.