For people who either own or lease a new car, getting gap automotive insurance is something that you might be interested in.  Basically, the purpose of gap insurance is to take up the gap that auto insurance leaves.  If you are unlucky to have your new or leased car stolen or it is involved in an accident, the gap insurance will pay for the difference between what your regular insurance covers and what is still owed to the finance company.

The difficulty people have when buying a brand new car is that as soon as you drive it out of the showroom a lot of the value of the vehicle is lost.  What also happens is that your insurance firm won’t cover the total amount you owe on the loan or the lease.  An example would be if you pay $30,000 on a new car and then some months later you are involved in a serious accident.  The car might now only have been valued at $22,000 which means that’s all the insurance company will pay out.

So what happens to the other $8,000 that is still owed to the finance company?  Well, you have to find that yourself.  It’s not very nice to be owing a company more than the car is actually worth.  So hopefully now you see the advantage of having gap auto insurance.  You will save a considerable amount of money if the worst is to happen and your car needs to be scrapped.

Frequently you will find that if you are taking a lease out on a car, gap insurance is part of the agreement.  However if you find that it’s not included then you will need to shop around for some cover.  Bear in mind that differences in cost can be pretty big which is why it so important to compare as many quotes as you can.

Normally you will buy gap insurance when you initially buy your car or take out the lease.  However you can still buy this kind of insurance at any time you feel necessary.  Of course, you’ll also want to ensure you have comprehensive car insurance too.  Strangely enough, you might find that your gap insurance policy won’t pay out if you don’t have comprehensive insurance.

What you need to be aware of is the fact that because you normally take out gap insurance when you are at the car dealership, they will often over-charge because they know that you probably will be too lazy to go elsewhere for a quote.  The good thing is that you can now buy gap insurance online for about $400, which is a one-time fee.