Here at Hopkins Acura, we know that drivers have a lot of choices to make when they’re shopping for a new vehicle. You have to decide on a model, options packages, and extra features, and then you’re not even done once you’ve found your dream car! You also have to decide what kind of coverage to get for that new Acura vehicle. One type of coverage you may be curious about is gap insurance. How do you know if you need it?
Simply put, gap insurance covers the “gap” between what your car is worth and what you owe on a loan. If you’ve ever had the unfortunate luck to total a car, you know that the insurance company will send you a check for what the car’s worth. That’s well and good, but what if you still owe money on the car? And what if you owe more than what your car is worth? This is where gap insurance comes in.
This insurance is designed to provide extra coverage so that you don’t end up having to pay more money for a car that you can’t even drive anymore. It protects the lender and you, ensuring that they get their money back for their asset and that you’re not on the hook for potentially thousands of dollars. You just need to talk to your insurance company to see what other coverage you need in tandem with gap coverage.
Because of the nature of gap insurance, it’s usually a good idea to get it in the first few years of your auto loan. New cars depreciate quickly, so you may end up with a gap sooner than you’d expect. Some leases also require you to get gap coverage, but even if an agreement doesn’t it might still be a good idea.
When you’re in the market for a new luxury vehicle, visit our Acura dealership near Palo Alto. Our knowledgeable dealers can answer all of your questions about the latest models and our Acura financing experts are also on hand to help. We hope to see you soon for a test drive!