Do You Need Gap Insurance?

New Nissan autos can be a tricky investment, particularly because the buyer can end up owing quite a bit more than the vehicle is actually worth the minute they drive away from our building here at Hall Nissan Chesapeake. Most new vehicles lose somewhere around 10 percent of their value the minute they leave the dealership, which means you could agree to a $25,000 loan and then get home with a vehicle that's worth only $22,500.

While it is unlikely, if you ended up in a wreck on the way home that totaled your vehicle, insurance would cut you a check for the value of the vehicle, minus your deductible, which would leave you with no car and no cash on hand for a new one. Plus, you would owe your financial institution the difference of the loan, which in this case would be over $3,000.

Going upside down on an auto loan is a fairly common thing, but that can be a big problem when an accident totals your vehicle. That is exactly why gap insurance exists. It covers that difference between what's owed and what a vehicle is worth. Especially if you are in the early stages of a long-term loan or if you rolled over a previous loan into a new one, you will need some sort of gap insurance coverage.

While your Nissan dealer servicing Hampton, VA can answer basic questions about this type of coverage, the best approach for getting the insurance you need is to reach out to your insurance agent and work out the details of your new purchase with them. Remember that vehicles require proper insurance, and just because you have the legal minimum does not mean you are properly protected in the event of a total loss.

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