Direct answer
You may not need it if your down payment is large enough to ensure your loan balance stays below the car’s depreciated value, but it depends on your specific loan terms and the rate of vehicle depreciation.
Automotive lending industry standards regarding equity positions and total loss claim settlements. For additional information about how total loss settlements and insurance coverage work, see the Insurance Information Institute‘s guide on auto insurance.
What this means for you
You may not need it if your down payment is large enough to ensure your loan balance stays below the car’s depreciated value, but it depends on your specific loan terms and the rate of vehicle depreciation.
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This page is informational and not a coverage guarantee or quote.