When you buy insurance coverage for your car, most companies will only insure your car for Actual Cash Value. Actual Cash Value is determined by subtracting depreciated value from what your car was worth when it was new. In many cases, a person may owe more money on their car then what the Actual Cash Value is, especially considering how quickly cars depreciate in value. Therefore, if the owner of the car totals the vehicle, they end up owing the bank money on a car they can no longer drive.
GAP Insurance was designed to cover the balance due on your car loan after your auto coverage pays out a total loss claim. In many cases, the car dealership will try to sell you GAP insurance and include it on top of your car payment. This is convenient, but you will find it can be quite costly, plus you end up paying interest on the GAP insurance. I recommend that you call your insurance agent to purchase GAP coverage. Your Georgia insurance agent can offer GAP coverage for a much better price and you won’t have to pay interest on the premiums.