What is Gap Insurance, and Why Do You Need It?

If you’re driver in the Wilmington or Jacksonville area, you may have heard about gap insurance. What is gap insurance on a car? In short, gap insurance protects you financially when you owe money on a depreciated vehicle. When you purchase a new vehicle, it starts to lose value the moment it leaves the lot. In fact, most cars will have lost 20% of their value after just one year.

What is GAP Protection for?

Standard auto insurance policies will cover the depreciated value of your car. So if you have an accident that badly damages or totals your car, your standard insurance will pay you current market value for your vehicle. But remember, your vehicle’s current value has depreciated in the time since you brought it home.

Gap insurance covers that difference — between what a vehicle is currently worth (paid by your standard insurance) and the amount you actually owe on it. Read on for how gap insurance can keep you feeling secure on the Wilmington roads.

When It’s a Good Idea to Get Gap Insurance

Gap insurance may be your best bet if:

• Your down payment was less than 20%.
• You financed your vehicle for 60 months or longer.
• The vehicle is leased (gap insurance is usually required when you lease).
• Your vehicle is one that depreciates faster than the average.
• Negative equity from an old car loan was rolled over into the new loan.

What’s Covered with Gap Insurance?

Now that you know when you’ll need gap insurance, what is gap protection? If you carry gap insurance wherever you travel on the Carolina Beach roads, you’ll have protection from the following:

• Theft
• Fire
• Vandalism
• Accidents
• Storm damage (flood, hurricane, tornado, etc.)

Find Out More at Coastal Kia of Wilmington

If you’re ready to insure your Kia, stop by Coastal Kia near Leland to chat with out financing department so we can help you develop a custom plan. If you’re in the market for your next vehicle, check out our wide range of new and pre-owned Kia models, and contact us to schedule a test drive today!