do you need gap insurance
Gap insurance covers the difference between the amount you owe on your car loan and the amount your auto insurance company will pay out if you total the car. Car dealers and lenders often offer gap insurance for $500 to $700, and youâll pay interest on that amount if itâs rolled into the loan. Gap insurance sounds like a good idea because your car loses value as soon as you drive it off the dealerâs lot. So if you make a low down payment (less than 20%) and wreck your car soon after buying it, you could owe more on the loan than the car is worth.