What is gap insurance and do I need it?

Gap insurance covers the difference between what you owe on your vehicle and its current market value in the event of a total loss. It is particularly useful for those who finance or lease a vehicle, as it helps protect against depreciation.

What This Means

Gap insurance is essential for anyone who has a loan on a vehicle, especially if you financed a used GMC vehicle, which may depreciate faster than you're paying off the loan. If your pre-owned GMC is totaled in an accident, your standard insurance may only cover its current market value, which could be significantly less than what you owe.

Why It Matters

According to recent statistics, nearly 40% of vehicles are worth less than what is owed on their loans within the first three years of ownership [Source]. This means that without gap insurance, you could find yourself in a difficult financial position if your vehicle is declared a total loss. Investing in gap insurance can provide peace of mind, ensuring you're not left paying out of pocket for a vehicle you can no longer drive.

Your Next Steps

If you're considering purchasing a used GMC or any pre-owned vehicle, it's wise to discuss gap insurance with your insurance provider. To learn more about financing options or to explore our quality used GMC vehicles, get in touch with Patriot Auto Sales today.