Gap insurance lease

Gap insurance for leased cars is a valuable coverage option that helps protect you financially if your leased vehicle is stolen or declared a total loss. In the event of a total loss, the insurance payout might not cover the remaining lease balance, leaving you responsible for the difference. Gap insurance steps in to bridge this gap.

When you lease a car, you’re essentially paying for the vehicle’s depreciation over the lease term. If the car is stolen or totaled, its value at that moment might be significantly less than what you owe on the lease. Gap insurance covers this disparity, ensuring that you’re not left with a substantial financial burden.

For instance, if the remaining lease balance is $20,000, but the car’s actual cash value at the time of loss is only $15,000, gap insurance would cover the $5,000 difference. This can be especially important when leasing, as you might not have built up significant equity in the vehicle.

Before leasing a car, consider adding gap insurance to your coverage. While leasing companies might offer gap insurance, you can also explore options through your regular auto insurance provider. Remember that terms and availability can vary, so it’s essential to thoroughly understand the coverage and its cost before making a decision.