What is gap insurance on a car?

Gap insurance on a car helps cover the difference between what you owe on a car loan and the car’s actual value if it’s totaled or stolen. For example, if you owe $15,000 on a car loan but the car is only worth $10,000, gap insurance would pay the $5,000 difference. It’s helpful for new cars that lose value quickly or if you have a long loan term. It’s good to consider getting gap insurance to protect yourself financially in case of an unexpected loss of your vehicle.

Posted by Alyssa DiCrasto

Alyssa uses her many years of experience writing about complex industries to research and create clear content that makes insurance easy to understand. She has been with Rate Retriever since its beginning, establishing our strict editorial policy and directing our comparison experience.

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