Once you purchase or lease your new Ford vehicle, it begins to depreciate like any asset. Depreciation varies depending on the type of car and initial cost, so you are well served to investigate this before you purchase. Potentially, according to data from CARFAX, a new car could lose more than 10 percent of their value during the first month of ownership.
Standard Auto Insurance vs. Gap Insurance
Standard auto insurance covers the depreciated value of a car. If you are in an accident that results in a total loss, the insurance company will only pay you the current market value. But this might not cover what you owe on the vehicle
In these situations, it’s a good idea to have gap insurance. Gap insurance will pay the difference between the market value and what you owe on the car. With gap insurance, you aren’t left paying for a car that is no longer drivable.
Why You May Need Gap Insurance
Here are some reasons you may want to consider gap insurance when buying or leasing a Ford vehicle at Elkins Fordland:
- You down payment is less than a 20 percent
- Your financing term is more than 60 months
- You are leasing—in this type of arrangement, gap insurance is usually required
- Your vehicle depreciates faster than average (do your research!)
- Negative equity from a trade was rolled into your new loan
Where to Find Gap Insurance
You can start by speaking to our financial experts at Elkins Fordland. They can advise you of your options are and if gap insurance is a good fit for your Ford vehicle purchase.
Visit your local Clarksburg, WV Ford dealership today to find out more about gap insurance and find your new car!