The Financial Importance of Gap Insurance

In many situations, you may have noticed that your auto insurance does not fully cover the financial losses you could suffer in an accident. The issue is frequent when balance to be paid on the vehicle loan is bigger than its book value. This is where gap insurance covers such losses to ensure full coverage for the losses associated with the vehicle.

The philosophy of gap insurance is that it covers the difference between the actual payments you have left, and the book value of the vehicle at the time it is totaled. Most vehicle insurance policies do not entirely cover your remaining payments, especially if the car is leased, or you made no down payment.

If you are planning to lease a vehicle, it is important to cover yourself with gap insurance to avoid any adverse situations. It is recommended for you to check with Ben Davis Ford Inc. while going for a test drive in Auburn, to know more about the gap insurance, and we would assist you with answers and solution.

Categories: Finance
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