Car insurance is one of those topics that nobody wants to talk about, but it is something that every driver needs to obtain. While it may lack the excitement of something like a new 2019 MINI Cooper Clubman, car insurance can save you big bucks in the event of an accident. One of the more obscure types of car insurance is gap insurance. The friendly dealers here at our MINI finance center are happy to explain what exactly gap insurance is and who should obtain it.
Put shortly, gap insurance is an optional, add-on type of insurance coverage that can help drivers cover the gap between the amount that they owe on their car and the car’s actual cash value. Stepping back a little bit, the moment you buy a new car from us, it starts to depreciate the moment it leaves the lot. Standard collision and comprehensive insurance policies cover the depreciated value, or market value, of a car. This can be a problem for some drivers who finance a car and put down only a small deposit because in the early years of the vehicle’s ownership, the amount of the loan can exceed the actual market value of the vehicle.
If you were to get into an accident where your car is totaled, the fact that you owe more on your car than what it is worth can cost you thousands of dollars on top of your insurance settlement. In this case, gap insurance would come into play, covering the difference between what your MINI vehicle is currently worth and the amount you owe on it. Thus, anybody who is leasing or paying off a loan on a vehicle in the Bedford, NH area should consider gap insurance.
To learn more, talk to a finance rep at MINI of Bedford today.