Car Gap Insurance
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
Understanding Car Gap Insurance
When you buy a new or used car, it loses about 20% of its value as soon as you drive it off the lot. If you haven’t put at least 20% down on your auto loan, you might owe significantly more than your car's current value for a while. For instance, if you purchase a car priced at $20,000, your loan could exceed your car’s value by $4,000. With car prices rising, many people finance the entire purchase amount.
Typically, insurance companies calculate payouts based on your car's book value, not what you owe on your loan. This can be problematic. If your car is totaled or stolen and your insurance only covers the book value, you might still owe thousands on a car you no longer have. Regardless of the insurance payout, you're responsible for the remaining loan balance.
To guard against this scenario, consider buying car gap insurance. Gap insurance covers the difference between your car’s book value and what you still owe on the loan. While dealers often charge between $500 and $700 for this coverage, you can find it online for less than $300.
Gap insurance is widely available in the US, UK, and other regions. As car prices surge and more people finance larger portions or even 100% of their auto purchases, gap insurance is becoming increasingly popular. To protect one of your significant investments, it’s worth considering automobile gap insurance.
You can find the original non-AI version of this article here: Car Gap Insurance.
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