Why You Need to Have GAP Insurance When Leasing a Car
GAP stands for Guaranteed Asset Protection (also referred to as Loan/Lease Gap Coverage) and it's a type of insurance that protects you from owing any money in the event that your car is totaled or stolen.
It's a minimal fee and many leases actually include it at no cost, but you need to make sure it's on the contract.
The reason you need GAP insurance is because most insurance providers pay out the actual cash value of the vehicle if it's stolen or totaled.
Since cars depreciate quickly in the first 3 years, chances are you will owe several hundred or even several thousand dollars to the leasing company to make up for the difference.
This is a simple thing to check, but it could save you a lot of money.
My Recommendation for Car ShoppersTrueCar No-Haggle, Edmunds Price Promise and 1-800 Car Show are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
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About: Gregg Fidan
Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.