WHAT IS GAP INSURANCE?

So you’ve driving your brand new Lexus car off our lot at Lexus of Pembroke Pines. You’ve taken care of all the financing and you can’t wait to get your car out on the highway, but there is still one thing left to care of: your car insurance. Now, car insurance isn’t the most fun topic out there, but our experts here at our LEXUS FINANCE CENTER are happy to explain how exactly insurance works. One kind of insurance that has Plantation, FL-area drivers especially befuddled is that of car gap insurance. Here’s a quick primer.

When you buy a new car from our dealership, the vehicle starts to depreciate the moment it leaves our lot. Standard auto insurance policies, which include collision and comprehensive insurance, cover the depreciated value, or current market value, of a car. When you finance a car and put down only a small deposit, in the early years of the vehicle’s ownership, the amount of the loan may exceed the market value of the vehicle itself.

If you get into an accident where your car is totaled, gap insurance will cover the difference between what a vehicle is currently worth and the amount that you actually owe on it. Gap insurance can make a large difference financially if you lease a car or are in the early stages of a large loan. People who should consider obtaining gap insurance on a NEW LEXUS CAR include drivers who made less than a 20 percent down payment, who financed for 60 months or longer, leased the vehicle, purchased a vehicle that depreciates faster than the average, or rolled over negative equity from an old car loan into the new loan.

Learn more about gap insurance from the friendly finance pros here at Lexus of Pembroke Pines!