When you buy auto insurance, usually insurance providers will only insure the car for its actual cash value. The actual cash value is determined by subtracting the depreciation from what the car cost when it was new. In some cases, someone might have to pay more money on their car then what the actual cash value is. This happens especially when you consider how quickly vehicles depreciate in value. So if the vehicle owner totals their car, they end up having to pay the bank money on a car that’s no longer in driving condition.
GAP Insurance was created to cover the amount owed to the bank after the insurance policy pays out. Usually the auto dealer will try to sell you GAP coverage and put it on your car note. While convenient, it can also be expensive and you’ll wind up paying interest on the GAP insurance. In some cases your insurance agent can provide you with GAP insurance for a more reasonable price. Additionally, you won’t have to worry about paying interest on the premiums.
Contact us to learn more about GAP coverage or to get a quote on Minneapolis auto insurance.