Gap Insurance is optional add-on car insurance coverage that can help you cover the gap between the amount you owe on your car and its actual cash value in the event it is totally destroyed in a car accident.It may be optional but also important in some cases.
Gap insurance may be a good idea for leased cars which you do not own fully.leased vehicles depreciate quickly.
Therefore, if you didn’t put much money down and you still owe a sizable amount on your total lease payment, you’ll likely owe more than the car is worth if you get into an accident. That’s especially true if the accident occurs soon after you drive off the dealer’s lot and the car hasn’t suffered as much depreciation.
Keep in mind, however, that the gap is constantly fluctuating. The difference between what you owe and what the car’s worth shrinks as you make monthly payments and as the car depreciates. So, you definitely won’t need the coverage for your entire lease period. You may only need it for a few months, depending on how good of a deal you negotiated.
So how do you buy a gap Insurance? You may be pleasantly surprised to learn that in many leases, gap insurance is already built into the contract. Check your agreement carefully to determine whether it’s included or not. Keep in mind the term gap insurance may not be used in the contract, and a more general term such as lease coverage might be used instead.
If you don’t have gap insurance coverage built into your car-lease contract, then you may want to add it to your current auto insurance policy. You may also buy it as a one-time fee through a lender or dealership and roll that additional cost into your lease payment. In addition, you may buy it as a one-time fee through a company that specializes in selling gap insurance.
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