Is Gap Insurance Worth It?

If you’re in the market for a new Kia model, then you want to ensure that you’ll have reliable coverage for years to come around Ann Arbor, Belleville, and Canton, MI. While traditional insurance plans are always a safe bet, gap insurance is another helpful option to protect your investment.

Learn more about gap insurance and how it can benefit you at LaFontaine Kia today!

Is Gap Insurance Worth It?

Now, you might be thinking, “Is gap insurance worth it?” or perhaps, “Do I need gap insurance?” In fact, many customers say yes. Here are a few reasons gap insurance can be an asset to you and help keep your vehicle in tip-top shape on the Michigan roads:

• Depreciation begins the moment you drive off the dealership lot.
• Accidents can happen at any time, including right after you drive a new vehicle off the lot.
• Most insurance companies only cover what your vehicle is worth at the time of the accident.
• If your new car is totaled or stolen and you owe more on it than its current deemed value, gap coverage accounts for that difference.
• The cost of gap insurance is relatively low and it is easy to obtain, so there is really no reason not to have it—just in case.

Do I Need Gap Insurance?

Gap insurance isn't mandatory in most states or for most insurance companies. However, a dealership or a lender may require it as part of a lease or loan agreement. It's essential to review your lease or loan contract carefully and understand your financial obligations, including the need for gap insurance. Even if it isn't required, gap insurance may be worth considering, if you'd face financial hardship paying off your auto loan or lease without it.

If you're a driver who's taken the plunge into purchasing a high-depreciation vehicle, gap insurance becomes even more important. These vehicles lose their value faster than the average car, meaning the gap between what you owe on your auto loan and the actual cash value of your car can be quite large.

How Do I Buy Gap Insurance?

If you’re sold on gap insurance, here are a couple of ways you can find gap insurance coverage:

• Your regular auto insurance company may offer it for a low monthly cost.
• You may be able to buy it for a one-time fee from your dealership or car loan company.
• You can get it from a specialized gap insurance company for a one-time fee.

Rely on LaFontaine Kia for Your Finance and Insurance Needs

Is gap insurance worth it to you? Ultimately, the answer depends on your personal circumstances, including your vehicle's depreciation rate, loan term, and the amount of your down payment. It's advisable to consider gap insurance when you've leased a vehicle, made a small down payment, or extended your auto loan beyond four years.

Learn more from our dedicated finance team as well as other helpful sources, such as our guides to buying used vs. buying new and leasing vs. financing. As always, if you have any questions, feel free to contact us and speak with a dedicated member of our finance team. You can also stop by our showroom near Ann Arbor, Belleville, and Canton, MI, and talk to us in person!