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Gap Insurance Quotes in New Jersey - Plymouth Rock

You were so excited the day you drove off the lot in your new car! Even though you still enjoy driving and maintaining your ride, some time has passed and the novelty of driving a new car has worn off. The exhilaration is gone. The new car smell has faded. One day you realize your car has depreciated and is worth less than what you still owe on it. Now what? It may be time to consider shopping around for gap insurance quotes. If you were to be involved in an accident in which your car was totaled, a standard car insurance policy would typically cover the current value of your vehicle at the time you filed a claim. This means that you would be indemnified or made whole based on the fair market value of your car. If you own your car outright, this sounds fine, but if you have an outstanding loan that exceeds the market value of your car, there would be a financial “gap” and you would owe the remaining portion of the loan amount. You can avoid being upside down, financially speaking, by covering the difference between market value and your total loan amount with gap insurance.

Here are the five reasons to consider shopping around for gap insurance quotes for your car. Many car loans are scheduled for sixty months. If you do the math, that’s five years, which is a long time when you consider the average length of time you drive the same car. According to research conducted by R.L. Polk and Company, the amount of time that a driver keeps a car is a little over seventy-one months, or about six years. Gap insurance may be a good idea here. 

Down Payment of Less Than Twenty Percent

If you make a sizeable down payment for a new car purchase, then there’s less of a chance of a financial gap developing between what you owe and what your car is worth. However, if your down payment is twenty percent or less, then you may want to consider gap insurance quotes because of the inevitable depreciation that will occur on your vehicle.

Lease Contract with a Dealership

It may not always be the case, but most auto dealers will require you to carry gap coverage on your insurance policy for a vehicle that you lease from them. Dealerships are well versed on value and depreciation associated with the products they sell. Protecting their own interests with a contractual agreement that mandates gap coverage on a leased vehicle from them is to be expected.

Quicker Than Normal Depreciation

How long your car holds its value will typically depend on what type of vehicle you drive. Generally, high-end vehicles such as BMW and Mercedes will lose about fifty percent of their value after just 3 years! If you drive or plan to purchase a late model car with a higher than average price tag, you may want to seriously consider gap insurance protection.

Low-Cost, Intelligent Coverage

It depends on the car your drive and your overall risk as a driver, but, on average, gap insurance will cost somewhere in the neighborhood of an additional twenty dollars a year to add to your policy. When you consider the potential financial gap you would be facing with a total loss and outstanding loan amount, an extra twenty dollars a year to transfer that risk to an insurance carrier is probably an intelligent move to make.

Final Thoughts on Gap Insurance Quotes

Gap insurance on your car is just another way to protect yourself financially. If you think you may need insurance protection based on how much your car has depreciated in comparison to a loan you may still be paying on, it’s probably a good idea to consider gap insurance quotes. Depending on the type of car you drive, its age and mileage, it can sometimes be tricky to determine how much depreciation has occurred.

If you have questions about gap insurance, a Plymouth Rock representative would be happy to help you determine the value of your car and answer your questions. Call us today and get more than just insurance!  Read here if you are exploring other available car insurance coverage options, or to find out more about how Plymouth Rock is ranked among the best insurers in NJ.

Call 855-993-4470, get your free quote online, or find an agent to learn more about getting gap insurance quotes in New Jersey. If you need additional information it can be found on our Contact Us page.