Gap Insurance

February 10, 2025||inPersonal Insurance|affordable premiums, auto accident, auto insurance, car insurance, gap insurance, lease gap insurance, personal insurance, premiums

Car owners often assume that if their car is totaled, it will be replaced at the amount they paid, or at least the amount they owe. However, that’s not always the case — learn why and what you can do to protect yourself.

Is Gap Coverage Right for You?

Car on road
Click here to submit an inquiry to Murphy Insurance or call us at 800 222 8711

Guaranteed asset protection, or gap insurance is an optional automobile coverage that helps you transfer the financial risk if you are involved in an auto accident and you owe more for your vehicle than the amount that it’s worth. This is referred to as being “upside-down.”

Since a new car’s value drops significantly the minute it’s driven off the lot, if you are involved in an accident that totals your vehicle in the first few years you own your vehicle, you may find yourself owing the finance company more than the vehicle’s actual value. Gap insurance provides for the “gap” between the two amounts.

Is Gap Insurance for Everyone?

New vehicle financing options: If you took advantage of a zero percent down payment deal or put a small amount of money down, or stretched the life of your loan past 3 years, gap insurance is most likely a good idea. That’s because the vehicle typically depreciates considerably faster than you have paid down the value on your vehicle’s loan.

Used vehicles: Gap insurance is typically not available for used vehicles. To cover your risk, it’s wise to put down an ample down payment and finance the vehicle for the shortest possible timeframe.

Leased vehicles: For those who lease a vehicle, gap insurance is considered an essential coverage because typically there is no trade-in and little cash put down to lease the vehicle. Similar to purchasing a vehicle, if the car is a total loss, you will owe the difference between what you have paid and what you owe on the balance of the lease.

Cost versus benefit: Gap insurance is offered for a nominal fee, which makes it a great value for anyone who finances or leases a new car.

Top Ways to Save on Your Auto Premium:

  • Consider raising your deductible.
  • Keep up your good driving record.
  • Drive less to qualify for a low-mileage discount.
  • Drive a car with safety features such as anti-lock brakes and airbags.
  • Install an anti-theft device.
  • Ask about our multi-policy discounts.

We’re Here to Help

Depending on your vehicle’s make, model and loan terms, we can help you determine if gap insurance is the right choice for you. If you’re purchasing a new vehicle, contact Murphy Insurance Agency at 800-222-8711 to learn about how gap insurance can complement your auto policy coverage options and keep you from getting caught upside-down!

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At Murphy Insurance, we are here to assist you in obtaining the appropriate auto insurance. Choosing the appropriate auto insurance coverage can be overwhelming. Every insurance company has its unique offerings, making it challenging to compare options effectively. That’s where we shine. We simplify the process by helping you evaluate provider and policy choices, seek out discounts, and optimize your car insurance within your budget constraints. Ultimately, our goal is to provide you with peace of mind, knowing that you and your loved ones are well-protected.