Unfortunately there are many times when the amount owed on the car actually exceeds what the vehicle is worth.

Do you need gap insurance if you own the car. Good GAP insurance can cover up to 25 more than the actual cash value of. Gap Insurance has one very specific purpose and doesnt extend to many situations. This is because a used car wont fall in value at the same rate as a new car.

Gap insurance is an optional car insurance coverage that helps pay off your auto loan if your car is totaled or stolen and you owe more than the cars depreciated value. Its best to have gap insurance coverage before you finalize your lease and drive off the lot. It can be a waste of money or a financial lifesaver.

Car insurance is necessary to stay protected financially on the road. Without it you would be required to pay the difference. Depreciation can reduce the value of a vehicle.

Gap insurance may cover some of the financial burden if you find yourself owing more than your car is worth when its damaged or stolen. It will create a gap as we described in the above section. If your insurer provides you with a compensation amount equal to your vehicles value gap protection is not needed.

Have him show you the information on gap insurance and ask whether or not it is included in your lease. Gap insurance makes up the difference between what a. Youre a good candidate for a gap insurance if you answer yes to the following questions.

Go over the entire lease with your car dealer when you lease a vehicle and ask about gap insurance. However if you total your car and the cars actual cash value is lower than the amount you owe on your loan balance or lease that difference or gap is not covered by insurance. Depending on your circumstances gap insurance can be a smart addition to your collision insurance policy.