Did you know that most new cars lose 20 percent of their value within a year of purchase? If you lease or finance a new car, depending on the size of your deposit and the terms of your agreement, the amount of your loan may be more than the market value of your vehicle.
Gap insurance is an optional coverage, referred to as the Auto Loan/Lease Coverage Endorsement, available to NJM Auto policyholders.§ This endorsement will pay for some or all of the difference between the balance of a loan or lease on a vehicle and what NJM pays if the car is considered a covered total loss. It does not pay for deductibles, carry-over balances from prior loans or leases, missed payments, or late fees. This protection cannot be added more than 30 days after you add the car to your policy.
You might want to consider gap insurance for a new car or truck if you:
- Made a down payment of less than 20 percent
- Financed for 60 months or longer
- Leased the vehicle (carrying gap insurance is generally required for a lease)
- Purchased a vehicle that depreciates faster than average