If you’re financing or leasing a car or other motor vehicle, you may have heard about gap insurance. Understanding this potential feature of auto insurance can unlock significant value and financial security, but understanding when it makes sense for you can be a complicated subject. The team at Metro Insurance Agencies, LLC is well-equipped with the knowledge and experience to help you tackle this topic.
What Is Gap Insurance?
Gap insurance, or guaranteed asset protection, is a type of coverage that can help pay the difference between what you owe on your auto loan or lease and the actual cash value of your vehicle if it’s totaled or stolen. Standard auto insurance typically covers the current market value of your car, which can be less than your remaining loan balance.
When Does Gap Insurance Make Sense?
Gap insurance can be beneficial for many vehicle owners, but it may be particularly valuable if the following scenarios apply to you:
- You made a low down payment. If you made a small down payment, you may owe more than your car’s value for a period of time.
- Your auto loan has a long term. Extended loan terms can slow the pace at which you build equity in your vehicle.
- Your vehicle depreciates in value quickly. Some vehicles lose value faster than others, increasing the risk of being “upside down” on your loan.
- You’re leasing your vehicle. Many lease agreements require gap insurance as part of the contract.
How Our Team Can Help
At Metro Insurance Agencies, LLC, our team is dedicated to helping motorists and vehicle owners in Oklahoma City, OK navigate their insurance options and secure optimal coverage. Contact us today to review your circumstances and discuss the potential value of an auto insurance policy that includes gap coverage.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.