| You're sitting in your car listening to James Taylor on | | | | purchase price. |
| the radio as you wait for the red light to change, when | | | | - Always get Gap Insurance if you are leasing or |
| the kid behind you looks down to change the song on | | | | financing at least 70% of the value of the car. |
| his Ipod and slams into the back of your car. The | | | | Insurance companies will only pay what your vehicle is |
| insurance company sends an adjuster out to inspect | | | | worth at the time of the collision. If it turns out the deal |
| the damage. A settlement offer arrives in the mail two | | | | you got from the dealership wasn't a deal at all |
| days later but the insurance company is offering | | | | (Insurance companies value cars based on similar cars |
| $2,800 less than what you owe on your loan, what | | | | in your market, check with or your local classifieds for |
| can you do? | | | | the current value of your car) or you rolled debt from |
| Most Americans have never heard about gap | | | | your last car into your current auto loan, gap insurance |
| insurance and if they have, they probably heard about | | | | will save you money if your car is totaled or stolen. |
| it after an accident and wondered why no one told | | | | Contact your lien holder to find out if gap insurance |
| them about it earlier. | | | | was included in your loan. If it wasn't, most lien holders |
| Gap Insurance is a small insurance policy on your car | | | | will let you add gap insurance (even if you didn't get |
| loan that kicks in when the amount the insurance | | | | the coverage when you bought the car) since they |
| company will pay for your totaled or stolen car is less | | | | would lose the collateral for their loan if the car is |
| than what you actually owe on the loan or lease. | | | | totaled in an accident. If your lien holder doesn't offer |
| However, most car dealers or auto loan officer leave | | | | gap insurance there are numerous insurance providers |
| Gap Insurance out of the sales agreement or loan | | | | online that provide independent policies. Just make sure |
| documents without asking you if you want it. If you | | | | they have top marks from one of the rating services |
| don't have it, you could be upside down on your loan | | | | such as A.M Best, Standard & Poor's or Ratings. Most |
| for an accident you didn't cause. Here's what you | | | | gap insurance policies average $5 to $10 a month. You |
| need to know next time you buy a car: | | | | may never need to use it but for the price, it's a good |
| - Always ask the sales representative and the loan | | | | thing to have! |
| officer if Gap Insurance is included in your loan or | | | | |