Insurance is best left to the professionals; you’ll want to call your insurance agent with any questions specific to your policy or personal information. However, what our Mazda finance experts can help with is explaining the basics of supplemental options you may want to inquire about, like gap insurance for example.
Gap insurance, or Guaranteed Auto Protection, is coverage that ensures you won’t owe extra money to your financial institution on top of what your primary car insurance covers in the event that your vehicle is totaled or stolen. Essentially, depending on the specifics of your situation, you may be on the hook with your bank to pay back money on a vehicle you don’t even have any more.
This “gap” issue happens due to rapid vehicle depreciation. As soon as you drive off the lot, the value of your vehicle decreases, but this doesn’t mean you owe any less money on it. You’re still responsible for interest, taxes, and other balances that went toward the principal of your loan.
It’s not necessarily uncommon to be upside down on your car loan for a time, especially if you make a small down payment or you choose a long (more than five years) payment plan. However, in the event your car is totaled while you’re “upside down” on the loan like this, some insurance policies will only give back the amount equivalent of the current value of the vehicle, minus the deductible.
Thankfully, gap insurance is fairly affordable and easy to get. Choose us to be your Mazda dealership in Ohio, and we will gladly help with any new car questions you may have. Come see us in Wooster today.