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  • Writer's pictureMERCADO KRAMER LLP

Gap Insurance and Why You Need It

READ THIS IF YOU HAVE A CAR PAYMENT: When you buy a new car and finance the purchase, you can end up in deep trouble if you're in a wreck. You need something called gap insurance. Cars lose value quickly. If your new car is totaled in a wreck, the money the at-fault driver legally owes you for the loss of the car may be LESS THAN YOU OWE THE BANK FOR THE FULL PURCHASE PRICE! You can purchase gap insurance to fill the "gap" between what you owe and what the car is worth when it's totaled out.

Image of someone buyinga  new car. If you have a vehicle loan, make sure you have gap insurance!


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