When Leasing Should I Get Gap Insurance?
Q: I just leased a 2007 BMW 328i and someone told me that I should probably get gap insurance. What it is it and why would I need it?
AIS Answer: Gap insurance covers the difference between what your payoff is and what your car is worth at the time of an accident. The difference without gap insurance is what you would owe.
If you’re leasing a vehicle, any vehicle, it’s a good idea to get gap insurance to minimize your loss in the event of an accident. When you look at a lease it’s back end loaded with low monthly payments, this is just setting you up for a big loss if you get into an accident because you haven’t paid much into the vehicle. Combine those two figures with instant depreciation and you’re at the wrong end of the deal if your car is totaled in an at-fault accident.
Whether it’s a lease or a loan, you’re almost always owing more than the car is worth for the first 4 years. Gap coverage will help you make up the amount that you would owe in case of a total loss and that amount could be substantial, especially if you just leased a vehicle.
Talk to a local insurance agent or your current car insurance company about gap insurance, they can give you the best advice and options for your specific situation.
Start Your Auto Insurance Quote
Related Articles
Filed under: Auto Insurance Questions
Content contained within AutoInsuranceStories.com is copyright autoinsurancestories.com © 2007. This content is not to be construed as insurance advice. You must always speak with a licensed insurance agent regarding your auto insurance policy.
Gap insurance is pretty important if you have a higher loan amount (payoff) then market value of your vehicle.
gap insurane is a great idea if you’re leasing a vehicle. You want to be able to cover the difference between what you owe and what your insurance will cover..which is the fair market value. It’s rare that you’ll get paid more in a claim than you owe to your finance company.
definitely get gap insurance you’ll be glad you did. When I was leasing my BMW I had a HUGE difference between what I owed to the bank and what the true market value of the vehicle was worth.