If your insurer provides you with a compensation amount equal to your vehicles value gap protection is not needed.

Do you need gap insurance if you own the car. Gap insurance is not a necessity its optional. 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. Its estimated to be about 5 of your collision and comprehensive.

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. On average according to CAP a three-year-old cars value will drop 14 in the first year 24 in the second and 33 in the third year. You have a used car although some with used cars do still buy it.

Its best to have gap insurance coverage before you finalize your lease and drive off the lot. Keep in mind the costs for adding it will vary. GAP insurance or guaranteed asset protection insurance to give it its full name is designed to protect you when you lease or buy a new car.

The insurance agency will send a check for the balance of the loan to the company and the remainder of the money will go to the policyholder so there is no need for GAP insurance. Simply put GAP insurance is additional insurance on a vehicle that covers the vehicles value between the amount you owe and the amount the vehicle is worth. Gap insurance is not for everyone.

If you owe 25000 on your car and the insurance company estimates the market value of your car to be 21000 at the time of loss gap insurance would cover the 4000 difference. Unfortunately there are many times when the amount owed on the car actually exceeds what the vehicle is worth. In addition to liability insurance and collision coverage you may also need to purchase gap insurance.

This is because a used car wont fall in value at the same rate as a new car. Consumers with a long loan term or a small down payment could. It can be a waste of money or a financial lifesaver.