Auto Insurance Policy - Auto Gap Insurance

Auto gap insurance is an auto insurance policy option that covers the difference between a car’s actual cash value when it is stolen or wrecked and the amount the consumer owes the leasing or finance company. Although most finance companies require car owners to have full coverage on a vehicle, auto gap insurance is not usually included. Standard comprehensive and collision auto policies only cover your new car's "fair market value". Due to the rapid depreciation of new cars, "fair market value" in the first two months can be as little as 80% of what you paid for your car.

If you are leasing your car, gap insurance is most likely required by the leasing company. Because a lessee usually has no trade-in or puts little or nothing down, in a total loss situation, you would owe the difference between what you have paid and what you owe on the balance of the lease. Often gap insurance is included in the cost of a lease and you do not have a choice of providers. If not, or if you are buying, your car dealer will probably be anxious to sell it to you. But shop around -- your best price will probably come from your existing auto insurer, if they sell it. Many do not.

If your car is stolen, the insurance situation is the same as in the case of an at-fault accident n your part. A comprehensive auto insurance policy will cover the value of the vehicle, but not necessarily the value of the loan that you owe to the bank. You could be stuck paying thousands for a car that is long gone. Add that to the truly disheartening feeling of having your car stolen, and that makes for a really rough time.

Auto gap insurance is needed only in the first few years of ownership. It could save you thousands if the car becomes stolen or wrecked. Also, it do not cost that much for your peace of mind.

Get the most current gap insurance quote online. Buying an auto gap insurance plan online is easy and fast. You can compare multiple offers with only one application.