Understanding Gap Insurance for New Car Owners

Guaranteed asset protection (gap) insurance is designed to cover the difference between what you owe on your car loan or lease and the vehicle’s actual cash value if it’s totaled or stolen. Standard auto insurance typically pays out the current market value of your car, which can be less than what you still owe, especially with new vehicles that depreciate quickly.

Why New Car Owners in Illinois Should Consider Gap Insurance

For many Illinois drivers, a new car loses value as soon as it leaves the dealership. If your vehicle is involved in an accident or stolen shortly after purchase, you could be left paying off a loan for a car you no longer have. Gap insurance can help protect you from this financial risk by covering the difference between your car’s depreciated value and your outstanding loan or lease balance.

You may benefit from gap insurance if:

• You made a small down payment on your new car
• You financed your vehicle for a longer term
• Your car is likely to depreciate faster than average
• You lease your vehicle

How Our Team Can Help

At Insure One Way, we’re committed to helping Illinois residents make informed decisions about their auto coverage. Our team can review your current policy, explain how gap insurance fits into your overall protection, and help you determine if it’s the right choice for your situation.

If you’ve recently purchased a new car or are planning to, let us help you explore your insurance options. Contact us today to discuss how gap insurance can help provide additional financial protection.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.