Why do I need gap insurance

Why do I need gap insurance?

If any harm has done to your car (used car or new car) it will be disaster and very painful to you and the value of the car will be came down all at a sudden. This could be depressing and financial loss for you, if the car fall into a big collision and damages itself by a good margin then the volume of loss will reach on a big amount.

For example, suppose you gave $25,000 for your car, which value comes down after three year time to just half this, at $13,000. If your car is being stolen or committed an accident, your car insurance company will only give you as the value of the car at the time, so $13,000.
Which means, if you want to purchase another car same as your old car, you have pay another almost $10,000 more from your own money.

In this case, gap insurance can be useful, as it covers security against cars depreciation by giving the shortfall between your car insurer's settlement and the price of your car now. So, as well as getting the $13,000 from your car's insurer, gap coverage will give you the remaining $13,000, and you can easily buy your car similar to your old car.