Negative Equity in Your Car? Gap Insurance

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How Negative Equity Kicks In

Negative Equity Cars
We have all heard of negative equity when referring to house owners and we know that it means that their houses have slumped in value compared to how much they owe on mortgage. If they default on their payments, the mortgage company might seize back the house, sell it off and the borrower still owes the gap between the sale price and the sum that they borrowed. Negative equity can and does arise in similar fashion when it comes to car ownership.

How a Car's Value Might Drop Rapidly
Some cars nowadays are becoming socially unacceptable. The gas-guzzlers are being frowned upon by some people for polluting the atmosphere and contributing to global warming. The government has jumped on the bandwagon and has targeted these types for higher rates of road tax. Result: there is a much lower demand for some types of car and their values fall.

Market Conditions
If such a car is written off by an insurance company, the insurance engineer is entitled to take current market conditions into account and he might downgrade the value of the car rather more than you had expected compared to normal wera and tear considerations. Then, you could find yourself with a classic gap that you need to fill from your own pocket.

Solution: seek out a Gap Insurance policy that will cover you for the shortfall. Click the link below for a quote.

Gap Insurance Quote