{"id":4793,"date":"2016-02-12T12:23:26","date_gmt":"2016-02-12T12:23:26","guid":{"rendered":"https:\/\/469899a3-97a5-4c9b-8d86-b9629724411a.cc10.conves.io\/?p=4793"},"modified":"2016-02-12T12:23:26","modified_gmt":"2016-02-12T12:23:26","slug":"sooo-i-bought-a-new-carno-down-and-72-months-to-payproblem","status":"publish","type":"post","link":"https:\/\/swflinsurance.com\/sooo-i-bought-a-new-carno-down-and-72-months-to-payproblem\/","title":{"rendered":"Sooo\u2026..I Bought a New Car\u2026No down and 72 months to pay\u2026Problem?"},"content":{"rendered":"

YES.<\/strong> You are upside down as soon as you drive off the lot. What should you do now? Make sure you have GAP Insurance<\/strong>\u2026If not, request it on your auto policy pronto.<\/p>\n

Gap insurance pays for the \u201cGap\u201d between what you owe on your car and what it\u2019s worth if it\u2019s total loss in a covered accident, theft or other loss. Some providers\u2014call it Loan\/Lease Payoff coverage.<\/p>\n

It\u2019s easy to determine if you need it<\/strong><\/p>\n

A quick comparison between what you owe on your vehicle (info you can get from your lender) and what your vehicle is actually worth will help you determine if GAP is for you.<\/p>\n

So ask: Do you owe more than the vehicle is currently worth \u2026..You are \u201cupside-down\u201d on the loan ?<\/strong><\/p>\n

If so, and if the car were totaled, could you pay the difference between what you owe and what your vehicle is actually worth today?<\/p>\n

If the answer to that second question is no, then buying gap insurance is probably a solid choice.<\/p>\n

What does gap insurance cover?<\/strong> Gap covers the difference between your vehicle\u2019s value and what you owe.<\/p>\n

So, let\u2019s say you get into an accident and your insurance company declares the car a total loss. If you have gap insurance, the scenario would play out like this:<\/p>\n

$28,000<\/strong>\u2014Amount you owe your lender (principal and interest).<\/p>\n

$25,000<\/strong>\u2014Amount your insurance company says your vehicle is currently worth \u2026 which the insurance company calls the \u201cactual cash value.\u201d<\/p>\n

$3,000<\/strong>\u2014Difference between your loan balance and the \u201cactual cash value\u201d for the car.<\/p>\n

$3,000<\/strong>\u2014Additional amount your insurance company will pay if you have GAP Insurance.<\/strong><\/p>\n

Know that this is a simplified example and other terms could apply. Most insurance companies will have Loan\/Lease Payoff coverage limits that will pay up to 25 percent of the actual cash value of your vehicle at the time of the loss. Still, that might easily make the coverage well worth a few extra dollars of premium. Coverage language can vary by company. Please review the policy form for coverage language.<\/p>\n

Where do you get it?<\/strong> You can buy gap insurance a couple of ways: through your car your auto insurance company, dealer or lender.<\/p>\n

The types of losses covered vary depending on the company providing the coverage, so be sure to clarify what is covered before making your decision. And, be aware that if you\u2019re leasing a vehicle, leasing companies often include gap insurance in their contracts automatically.<\/p>\n

The cost can vary, too. While most dealers and lenders offer the coverage, it may be cheaper to buy it through your insurance company. Plus, you get the benefit of having it billed as part of your total insurance premium, and generally speaking, the claims process is smoother as you\u2019re working with just one company and one claims representative in the event of a loss.<\/p>\n

A couple more things to note about Gap Insurance:<\/p>\n