You have finally found the perfect vehicle and are in the final steps of the car buying process. As part of this, you’ll most likely be discussing with your insurance provider and dealership your new car insurance policy. If you have car insurance, you’ll be fully covered if you get into an accident, right? Well, maybe. While most policies are designed to compensate you if there is an accident, there may be circumstances in which you’ll find yourself paying more for the vehicle than it is worth. If you lease your car or are still making payments on a loan you could find yourself in this situation.
If an accident occurs or your car is stolen, your insurance provider could determine a value for your vehicle which is less than what you paid. Yet, you could still be on the hook for the full value of the vehicle to the financial institution that holds your lease or loan. Basically, you could find yourself without a car and owing your lender the difference between the insurance settlement and the amount left on your loan. Not ideal!
Gap insurance is designed to help protect you from this problem. It will cover the “gap” between the two different valuations and you’ll get enough money to replace your car with something of comparable value. Not everyone will need this coverage. But if you recently purchased your vehicle and are on a longer-term loan, it is definitely something you should consider.
The ins and outs of car insurance can be confusing, but our helpful finance professionals at Vicksburg Chrysler Dodge Jeep® RAM can help guide you. We’ll make sure all of your questions are answered. Whether you need help with car insurance for your new RAM truck or are interested in leasing a Jeep Cherokee, you can count on the friendly finance team at our Jeep dealership to provide expert advice and excellent customer service.