What is gap insurance and do I need it?

Gap insurance covers the difference between what you owe on your vehicle and its actual cash value in the event of a total loss. It is especially important for those financing a used Chevrolet or other pre-owned vehicles.

What This Means

When you purchase a vehicle, it depreciates in value the moment you drive it off the lot. If your used Chevrolet is totaled in an accident, your standard insurance will only pay out based on its current market value, which may be significantly less than what you still owe on your loan. Gap insurance fills this financial gap, ensuring you aren’t left making payments on a vehicle you can no longer drive.

Why It Matters

According to recent statistics, about 30% of vehicles are financed with loans that exceed their market value shortly after purchase [Source]. This discrepancy can leave buyers vulnerable if an unforeseen accident occurs. By having gap insurance, particularly for high-depreciation vehicles like certain models of used Chevrolet, you protect yourself against substantial financial loss and peace of mind while driving.

Your Next Steps

If you're considering purchasing a used Chevrolet or any other pre-owned vehicle, it's wise to evaluate whether gap insurance fits your needs. Speak with your insurance agent about adding this coverage to your policy or inquire with us at Stewart Automotive Group for recommendations tailored to your situation. If you have further questions or need assistance, get in touch with our knowledgeable team today!