Tacoma Car Accident Attorneys

Gap Insurance

If something happens to a vehicle that is leased during the lease that requires the lease to be paid in full, GAP Insurance protects the customer. Here is an example: if your car was stolen and not recovered, your insurance company might say that your car was worth $17,000 based on current used car prices. The payoff on your lease might be $20,000. Without GAP Insurance you are responsible for that $3,000 difference. It’s common in a lease to be in this negative equity position. Many dealers will try to sell you this coverage for about $500. But be wary!

While the idea GAP Insurance is a good one, you don’t necessarily need to pay the dealer a huge profit for printing a form. Many lease companies include GAP insurance with their lease agreements at no additional cost. Also, many insurance companies will now let you pick up GAP coverage or Auto Loan/Lease Pay-off coverage for a small fee (about $40per year) on your regular auto insurance.