Gap Insurance for Your Subaru Vehicle; Yay or Nay?

 

A lot of logistical work is in order after purchasing or leasing a vehicle. Our finance department will assist you with the number crunching. One issue that will come up is whether to opt for gap insurance. Many people have heard of gap insurance in passing but otherwise know little about it. We’ll explain how it works and if it’s beneficial under your specific circumstance.

As the saying goes, a new car begins depreciating the minute it leaves the dealership lot. The purpose of gap insurance is to cover the difference between what you owe on the vehicle and its depreciated value.

Here is an example that explains how it works. Let’s say you purchased a 2019 Subaru Outback within the last year or so, and you still owe, say, $25,000 on it. You get into a collision, and the car is totaled. Regular insurance, though, only pays you the full amount of the car’s depreciated value according to Kelley Blue Book. If the depreciated value is $22,000, then that means you still owe $3,000 for a car you no longer possess. This is where gap insurance comes in and covers the $3,000.

So, is gap insurance right for you? This is a question our finance department will help you answer. Typically, gap coverage is highly recommended if you lease a vehicle. It’s also a beneficial safety net for those who drive a lot; quickly racking up the miles leads to more rapid depreciation.

Go to Investopedia for a more in-depth explanation on the inner workings of gap insurance.

Whether buying or leasing near Pearland, TX, gap insurance provides peace of mind for many motorists. We will make a recommendation depending on factors like car model and your driving habits.

Categories: Finance
)
; ;