A STOLEN OR TOTALED CAR DOESN’T HAVE TO BE A NIGHTMARE

Owning a brand new car can bring you happiness and fulfillment. Driving your new car home and parking it in your garage can be considered as one of the most joyous moments. This new car can mean so much and will develop a sense of achievement considering the fact that you finally own a new car because of your hard work. A brand-new car will also renew your feelings of responsibility especially if you took out a loan to pay for it as well as saving for its periodic maintenance. How can these moments not put a smile on your face?

However, unfortunate events may happen at a glance. Can you imagine how devastating it will be to have your car declared a total loss because of an accident or theft? Having a car totaled or stolen is traumatic enough. And worst is, you still must make loan payments for a car you no longer have.

If this event happens, the insurance company is not obligated to pay off the loan value in full. It is only responsible to pay market value for the car, which can be far less than what you actually owe due to depreciation. Although you may have spent a significant amount of cash to pay for your new set of wheels, it will immediately depreciate once you take it off the lot. Cars can lose over 10% of their value during the first few months of ownership and over 20% in the first 12 months.

In order to avoid making payments on damages that exceed the value of your car, it may be worth it to consider adding gap insurance to your policy. Gap insurance stands for Guaranteed Asset Protection insurance. It is an optional, add-on coverage that can help certain drivers cover the “gap” between the financed amount owed on their car and their car’s actual cash value (ACV), in the event of a covered incident where their car is declared a total loss.

Who needs Gap Insurance?

Gap Insurance is a good option for the following types of drivers:

• Drivers who owe more on their car loan than the car value.

If you are currently making a car loan payment, be sure to calculate the loan balance and compare it against your car’s current cash value. If there is a gap, you should consider gap insurance.

• Drivers whose car loan requires gap insurance.

Some loan providers require gap insurance from the outset of your loan regardless of what you owe.

• Drivers whose lease requires gap insurance.

Many auto leases require gap insurance as a protective measure. Some lease providers may already include gap insurance in the price of the lease.

Is Gap Insurance worth it?

Gap Insurance takes effect in the event of a complete loss of your vehicle such as theft or a covered accident which renders your car a “total loss”. It can also cover you in case of natural disasters such as hurricanes, wildfire, flooding, and more.

Even if you have great defensive driving skills, or a cautious and responsible driver, not everyone else on the road is. Gap insurance can cover you in the event of complete loss. Learn more about whether gap insurance is right for you. Contact ONYX Insurance and get a quote now.

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