Do You Need Gap Insurance?

It's a given, new vehicles always decrease in value the moment you drive them off of a dealer's lot, but the dips we've seen in truck and SUV resale prices (although they've improved recently) have made the initial downturn even steeper. If prices continue to drop, we'll have to drive our trucks for longer periods of time before value and original cost equalize. When you finance the majority of a new vehicle's purchase price, value loss can be a problem, because you'll be driving around in a truck that the insurance company regards as pre-owned, and its coverage may not come close to the amount you owe the finance company if the truck is damaged beyond repair. Gap insurance protects you by picking up the slack between what you owe and what the truck is worth -- an important add-on anytime, but critical during tough economic situations.

Gap Insurance Basics