Back to a new car, THE GAP and $25
We are back to car buying at our house again. Right now I am hoping that my husband is NOT following my blog post. For now the “we” is my daughter and I. When the car mechanic says, “You really need to get rid of that car”, we decide to review new car options!
There are three things I know about whatever car we decide upon.
- The car will be in my daughter’s name. She does officially have a “real” job.
- My daughter will be getting her first official CAR LOAN. (This loan will be unlike the loans she has had from her family which are not always required to be paid.)
- I will be adding GAP Insurance to her policy for $25.
Now the first two of these I am pretty sure you get. Her car = Her name = Her Car Loan
The third thing : GAP INSURANCE the one concept that I wanted to share.
Whenever you buy a car and have a car loan, always look at the GAP INSURANCE offered by your insurance agent.
Here is how it works:
If my daughter has an accident with her new car, she will still owe the full amount of her car loan. Since the car will be insured for the actual cash value and not the “purchase price or loan amount”, there may be a GAP in these two numbers. The GAP INSURANCE is intended to cover this gap. It is important for my daughter to add this GAP INSURANCE as she does not have much extra money to cover this gap herself.
Personally this GAP INSURANCE is a really great deal for me because at the cost of $25, I will not be approached for funds if there is an accident.
Please note that all Gap Insurance is slightly different and the cost of the Gap Insurance does vary. My suggestion is just ask about the coverage and the cost whenever you aquire a new car!