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FP Story - Gap Insurance

Illustration for article titled FP Story - Gap Insurance

I figure most folks know this already, but when you have an outstanding loan on a vehicle that you could potentially be upside down on during the course of the loan, carry GAP INSURANCE. I’m not an insurance salesman or even remotely educated in insurance, but the basics are the insurance company will cover any “gap” between what you owe and what the value of the vehicle is.


With loan terms as crazy as they are now a days, it is even more important.

Also make sure that you have good uninsured motorist coverage, this is another often overlooked coverage that can burn folks.


Lastly, how on Earth can you be “significantly” upside down on a 6 yr old vehicle that probably didn’t cost 20k and is still likely worth 5-6k. That’s 72ish months worth of payments on a new car that you still owe multiple years on. The article says that it would take 3 years to pay back half the remaining balance (insurance is paying the other half), simple math says this was a 12yr term loan, what the crap. People’s financing decisions on car purchases amaze me.

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