What is better for a new Mitsubishi, gap insurance or new car replacement insurance?
I just bought a new Mitsubishi Lancer and my car insurance offers gap or new car replacement insurance. What do these actually cover?
Answer provided by
Answered on Apr 30, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
“Since a new vehicle’s value depreciates quickly, new car replacement insurance ensures that if your vehicle is totaled, you’ll be reimbursed with enough money to get a car of a similar make/model. Coverage can vary, with some policies offering the option to repair the vehicle instead of replacing it.
When deciding what’s best for your vehicle, it’s important to look at the bigger picture. Gap insurance covers any difference between the amount you owe on your loan and the actual cash value of your vehicle (original price minus depreciation).
If your vehicle was totaled tomorrow, would you be able to pay off your loan? Or would you experience financial hardship?
If you wouldn’t have an issue paying off your loan, new car replacement insurance may be a better option for you as you’ll be able to get into a new vehicle faster.
Did this answer help you?
Ask us a question by email and we will respond within a few days.
Have a different question?
You can meet us at our office and discuss the details of your question.
Browse by topics
What others are asking
What are the best cars for seniors?
"My wife and I are closing in on retirement. Neither of us is as limber as we used to be, and mobility could be an issue down the road. Which cars do you think are suitable for us? "
Apr 13, 2021
Do I need to keep full coverage on 2013 Toyota Corolla once I pay it off?
I'm going to be paying off my car soon and I'm considering dropping my full-coverage insurance. My six-month premium would be cut in half with just liability. My car isn't in the best shape, so I'm not really concerned about damage.
May 07, 2021
What's the cheapest car insurance for a 24-year-old woman with a lackluster driving record?
I currently pay about $170 a month for car insurance as a 24-year-old woman, which is difficult for me to afford. I also have three car accidents (two at-fault) and two speeding tickets. Where can I find the cheapest car insurance?
Apr 13, 2021