Do You Need Gap Insurance?

Motorists have various policies to consider when insuring their vehicle. On top of their regular coverage, they may opt to add gap insurance. Not many people are familiar with gap insurance or how it works, which is why our Kia dealers serving Union, NJ will explain the ins and outs of gap coverage in a laymen-friendly manner.

In its most basic terms, gap insurance essentially covers the difference between your car’s actual value and what you still owe on it. Let’s look at an example to see how it works.

Let’s say you were in a collision where the other driver was at fault. An auto shop determines the car is totaled beyond repair. However, you still owe, say, $10,000 on the car loan. The vehicle’s actual cash value, though, is only $8,000. That means your insurance will only pay $8,000. The remaining $2,000 comes out of your pocket. This is where gap insurance comes into play and can cover that $2,000.

We recommend gap insurance as a safety net if you drive a leased car or are still making payments on your vehicle. We suggest looking up Kelley Blue Book to determine the cash value for your particular vehicle model and year. If the gap between what you owe and the actual cash value is beyond what you’re comfortable paying out of pocket, gap insurance is a smart choice.

Are you shopping for a car? Come by Sansone Kia and see our finance department near Union, NJ. We will go over your insurance options with you whether you are buying a new or pre-owned vehicle. We have plenty models in stock, such as the 2019 Kia Sorento or Kia Optima.

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