Loan/Lease Gap Coverage

Loan/Lease Gap Coverage is a type of insurance that provides financial protection for individuals who have taken out a loan or lease to purchase a vehicle. When you finance a car or lease it, there is the risk that the vehicle’s value may depreciate faster than you are able to pay off the loan or lease. This means that if your car is stolen or totaled in an accident, the insurance settlement you receive may not be enough to cover the remaining balance on your loan or lease. This is where Loan/Lease Gap Coverage comes in. It helps bridge the gap between the actual cash value of your vehicle and the amount you owe on your loan or lease. In other words, it covers the difference between what your insurance company pays out and what you still owe. This coverage is particularly useful for those who are financing a vehicle with a high loan or lease balance, or for individuals who are making a small down payment. By having Loan/Lease Gap Coverage, you can have peace of mind knowing that you won’t be left with a significant financial burden in the event of an unforeseen circumstance. It is important to note, however, that this coverage typically only applies if you have comprehensive and collision insurance on your vehicle. Additionally, each insurance policy may have its own specific terms and conditions, so it is essential to carefully review the policy before making a purchase decision. Overall, Loan/Lease Gap Coverage is an important safeguard that enables vehicle owners to protect themselves from potential financial hardship caused by depreciation and unforeseen events.