Do I Need GAP Insurance on a Leased Car?
Getting into an auto collision can be a manageable experience when you have a team and the tools to know what to do. Finding a reliable car repair facility, dealing with auto insurance companies, and recovering physically and mentally are just a few things you need to go through after a collision.
At Collision 24 Auto, serving Brockton, Easton, and Bridgewater, Massachusetts, we provide you with trusted experts to carefully and diligently evaluate your vehicle and its damages. And if you’re driving a leased vehicle, look at why it’s a good idea to get gap insurance on a leased car now rather than later.
What Is GAP Insurance?
GAP stands for “guaranteed auto protection” and is a type of auto insurance that protects you from complex situations. If you total your car in a collision and discover that the amount you still owe in car payments is greater than the car’s value at the time of the incident, you’re still responsible for paying the remaining amount.
GAP insurance offers a way out of this scenario because it covers the difference between your car’s actual value and the amount you still owe in payments. When you total your vehicle, your regular auto insurance pays you the actual cash value of your car at the time, without regard for how much you have left to pay on it.
GAP insurance bridges this “gap” by paying you the difference between how much you owe on your vehicle and its worth.
How Does a Car Lease Work?
Leasing a car is another way to say you’re renting a car. The amount you pay in monthly lease installments is based on the vehicle’s projected depreciation and is the total amount of depreciation.
So, if you’re considering leasing a vehicle that’s worth $20,000 at the beginning of your lease term but is expected to only be worth $12,000 at the end of your term, you’ll be making payments on the $8,000 difference.
Why You Need GAP Insurance on a Leased Car
If you’re considering GAP insurance on a lease, it’s a great way to get extra peace of mind. Leased vehicles can sometimes have a balance higher than the car’s value, especially if stolen or totaled. Plus, leased vehicles tend to lose value quickly, so if something happens early on in your lease, you might owe more on your lease than what the car is currently worth.
GAP insurance can cover that difference, saving you from paying out of pocket. Here are a few essential things to keep in mind when considering leasing a car and purchasing GAP insurance:
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GAP insurance on a leased car only pays you if you also have collision and comprehensive insurance.
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You might need to continue making payments on your lease until the GAP insurance pays out.
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GAP insurance is no longer valid if you don’t abide by the terms of your lease.
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You can purchase GAP insurance after you sign your lease.
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There’s a chance that your lease down payment will also be covered under your GAP insurance.
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Double-check that the insurance offered by the leasing agency or dealership or that your leasing insurance doesn’t already include GAP insurance.
Feel free to ask our team of friendly technicians any questions you have regarding GAP insurance on a lease and how it might benefit you.
Contact Us to Learn More
At Collision 24, serving Brockton, Easton, and Bridgewater, MA, we work to preserve your peace of mind by providing insightful knowledge and services in auto maintenance and repair. If you’re wondering whether you should get GAP insurance on a lease vehicle, contact our team and make a comfortable decision.