What is Gap insurance?

When you buy or lease a new car, and have a claim, the insurance company will only pay what the car is worth. As you drive the car, its value reduces signifigantly, espescially in the first year or so. If the car were to be damaged or stolen, it would be very likely that you would owe more to the bank than the car is actually worth.

So as an example, if you bought a $25,000 car, and had an accident 6 months later, the insurance company might pay for the car, at about $16,000. But you had only made a few payments, so the bank is still owed lets say, another $7,000. The insurance company won't pay them that money. You are responsible for this "gap" in coverage.

A gap policy will pay this difference for you, so you wont lose anything on the back end.

____________________________________
Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681