Loan/Lease Gap Coverage – What is it and why should I buy it?

In case you didn’t know. When you take out a loan for your new car/truck, be SURE that the lender puts loan/lease gap coverage on your loan. If your vehicle is totalled in an accident, the insurance will offer you a “totalled value” which is probably less than you still owe your bank, seeing as how the vehicle is now worth MUCH less in totalled condition. You end up owing your bank the difference. This can only be done at the start of your loan. If you don’t and you have the bad luck to total your car that you still owe a lot of money on – the insurance offers you the “totaled value” which is not enough to pay off your loan-but you still need a car, right? So you go out and get another car with another loan and now you are in a situation we like to call “upside down on your loan”. You owe WAY more than you could ever get out of it.

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