According to the Federal Reserve Bank of New York, 107 million Americans have auto loans, which means that 43% of Americans owe money on their vehicles. This can be dangerous considering that cars depreciate so quickly and leave car owners upside down in their loans. If you owe more on your car loan than your car is worth, you’re certainly not alone, and gap insurance can help.
What You Should Know About Car Depreciation
If you buy a brand new car, it loses up to 30% of its total value the instant you drive it off the sales lot. This loss of value doesn’t stop, either. As of 2017, the average rate of depreciation of a vehicle between years two to six was 17.6%. Even if you buy a used car to avoid that initial 30% loss in value, you’re not shielded from depreciation in the future. Continue reading “Cars and Depreciation: Why You Need Gap Insurance”