Now you have your brand new car that you’ve dreamed for years which cause you to save a huge amount from your salary. Of course, you want to have a full protection to secure it and to save you from further expenses. So, you buy an insurance for your car including a third-party policy that could save you for the cost of injuries and damages. However, did you know that in case you got involve in an accident, the amount of money that the insurance will give to you is not the original price of the car, but the current amount of it in the market? Unfortunately, if you buy a brand new car, its value drops by a third as you drive it off. You will not realize that in just one year, its price will fall down by 40% and up to 60% in the average of three years. So practically, there is a difference of price from the time you buy it and the time that you could have an accident.
By having this kind scenarios, that’s where gap insurance quote comes in. This type of insurance is the one who will pay for the difference between the price from the time you buy the car and the time that you have an accident. Here, we list down some reasons why you should consider a gap insurance.
When you Don’t Want to Settle for the Current Market Price
Obviously, you could not buy a brand new car that has the equivalent specifications of your current car due to its depreciation. If the price of your current car today is $20,000 and its current price now is $10,000 then the gap insurance would pay you $10,000. If you do not want to settle with the current amount of your car in the market and want to retain the amount of money that the car originally cost, then you should have gap insurance.
Your Car is Purchase Through a Loan
The gap insurance is useful when you purchased the car through loan because even when you receive the amount of money which is equivalent to the current price of the car in the market, you are still paying the same value that it has when you first bought it. So whatever happens to the car, you are not exempted to pay back the loan. By having the gap insurance, it will ensure you to pay the whole debt earlier so you will not be left behind paying the car that you do not have anymore.
Insurance are essential for security in avoiding further expenses, a gap insurance is there to give additional help.