An important term to understand: gap insurance.
Gap insurance is something many drivers overlook but can be crucial in the event of an accident. If your car is totaled or stolen, gap insurance covers the difference between what you owe on your car loan and its current market value.
As soon as you drive a new car off the lot, its value starts to depreciate. If you're involved in an accident soon after purchasing, you may owe more on the car than it’s worth. Gap insurance protects you from this financial gap.
