Do I Need Gap Insurance?

 

We’re lucky to be Mitsubishi dealers in Wilkes-Barre, PA because we get to meet new people and see drivers we’ve known for years every day, which is why we’re lucky. As we meet new motorists and talk to familiar faces over the course of a typical day, we’re usually asked a bunch of questions. Gap insurance is a popular topic that comes up often.

While it may sound like it’s named after a clothing retailer, gap insurance is actually a type of car insurance. It’s a completely different kind of coverage than your standard car insurance, however. Gap insurance is designed to pay the difference between what you owe on your car and the current market value of your vehicle if your automobile is destroyed due to an accident or theft.

Your standard car insurance will only pay up to the fair market value of your vehicle regardless of what the balance is on your auto loan. If you owe more than the value of your vehicle when it’s totaled, you’ll have to pay the difference out of pocket. If you have gap insurance, you won’t have to pay a penny to cover the difference between your loan balance and your automobile’s market value.

While gap insurance is normally very affordable, not every driver needs it. If you don’t have a car loan, you don’t need gap insurance. If you can pay off the remaining balance of your car loan with ease if you had to, then you don’t need this kind of coverage either.

There are some instances where gap insurance is a smart buy. If you put less than 20 percent down on your vehicle, you may want to get gap insurance. If you financed your car over 60 months or more, getting gap insurance is normally a good idea.

If you want to buy or lease one of our new Mitsubishi cars, visit MotorWorld Mitsubishi and we’ll help you decide if gap insurance is right for you.

Categories: Finance
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