Typically when you buy car insurance, many carriers will only cover your car for Actual Cash Value (ACV). ACV is buying price of your car, and then removing the the car's depreciated value.
There are instances, where a driver will owe more money on their vehicle than the Actual Cash Value. This is especially true considering how quickly a car’s value decreases once it’s driven off the lot. In these cases, if the owner of the vehicle has an insurable event that results in a total loss, they will end up owing their auto lender money on a car they’re no longer able to drive.
GAP insurance was created to pay the difference between the actual cash value and the remaining loan balance in the event of a total loss. In most instances, a car salesman will try to push the dealer’s contracted GAP policy and include the premium into your monthly car payment. This can save you time, but you will soon discover it can be very expensive. This is also not a very cost effective policy as you will end up paying interest on the GAP coverage since it’s lumped together with your loan payment.
Contact us, your independent insurance agent for GAP coverage. We can provide you with coverage at a lower rate without the interest on your policy premiums. Contact us today at 770-422-0456 for more information about GAP Insurance or get a free Marietta GA car insurance.