Whether you’re leasing a 2019 Lexus ES 350 or financing one of our creative writing activities for youth, you may want to purchase gap insurance. You might be thinking, “I already have auto insurance. Why would I want to get gap insurance?” Unbeknownst to many, gap insurance actually provides coverage you won’t find in your regular car insurance.
Gap insurance kicks in where your standard auto insurance checks out under certain circumstances. Your standard coverage will reimburse you for the current market value of your vehicle if it’s totaled or stolen and remains unrecoverable. While that’s unquestionably generous, it may not be enough to prevent you from having to pay out-of-pocket if you owe more on your car loan than the amount you get from your insurer.
Gap insurance is designed to cover the difference between what you owe your lender and what your standard auto insurance policy pays up to a pre-determined amount. This will prevent you from having to tap into your savings to pay off the lender that holds your car loan.
In many cases, you’ll be required to purchase gap insurance if you lease an automobile. It’s often wise to voluntarily opt for this kind of insurance if any of the following apply to you:
- Your vehicle will depreciate quicker than a typical car
- You rolled negative equity into your current auto loan
- Your car loan will last for five years or more
- Your down payment was 20 percent of your vehicle’s purchase price or less
If you’re unsure about whether you should get acquire insurance, head over to our Lexus finance department near Fruit Cove, FL to talk to our experts. We’ll review your situation and help you decide whether this kind of coverage is a smart buy based on your unique circumstances. Visit Lexus of Orange Park today.