If you just bought a new vehicle such as a 2016 VW Passat and you financed your purchase, you could end up owing your lender a lot of money if your automobile is declared a total loss due to an accident or theft. That’s because the company you purchased car insurance from may not reimburse you for the full amount you paid for your vehicle. Luckily, you can protect yourself from having to pay a large amount out of pocket by getting insurance that is known as “gap insurance.”
Gap insurance is a type of car insurance that will pay the difference between the compensation you receive from your car insurance provider and what you owe your lender if the initial payment you receive from your insurance carrier isn’t enough to pay the balance of your car loan. For example, if your car loan has an outstanding balance of $10,000, your vehicle is valued at $8,000 by your insurer, your automobile is declared a total loss, and you don’t have gap insurance, you’d be responsible for paying $2,000 to your lender. If you had gap insurance, your gap insurance policy would pay your lender the difference between what you owe and the amount your auto insurer reimburses you.
When you arrive at our Volkswagen dealership near Columbia, MD to buy an automobile, our finance experts will explain that one of the options that’s available to you is adding gap insurance to your purchase. You can get gap loan protection with a face value of up to $50,000 when you buy a car from Heritage Volkswagen Catonsville. The cost of this coverage is as little as $749, or just $15 per month.
If you want to learn more about gap insurance or any of the other options that are available to you when you purchase a vehicle from our convenient location, give us a call, contact us online, or stop by Heritage Volkswagen Catonsville today.