Fill a car-insurance gap

The auto show that runs through Sunday at the Minneapolis Convention Center may infect you with new-car fever. But here's a tip before you dive in.



Consider gap auto insurance if you're buying a new vehicle with little or no money down. Nearly 30 percent of new-car buyers are "upside down," meaning they owe more on their loans than their cars are worth, according to Money magazine.



Let's say your new car is totaled in an accident six months after you buy it. Your insurance company will pay you only for its actual cash value. And because most cars depreciate 10 to 20 percent when driven off the lot and up to 50 percent in the first year of ownership, you could owe the bank several thousands of dollars more than what your settlement check covers.



Gap insurance increases the total cost of comprehensive and collision insurance by 5 to 10 percent, but keeps the car owner from being in the hole when shopping for a different vehicle. It pays the difference between the actual cash value of the totaled car and the amount of the loan. The insurance is available only when the car is new.