Glossary
Gap Insurance
Pays the difference between your vehicle's actual cash value and your loan or lease balance if the vehicle is totaled.
What is gap insurance?
Gap insurance pays the difference between your vehicle’s actual cash value and what you still owe on your loan or lease if the vehicle is totaled or stolen.
Details
Gap is most useful in the first 2-3 years of a new vehicle loan, when depreciation has outpaced principal payments. Without gap, a total loss can leave you owing money on a car you no longer have. Gap is usually offered by lenders, dealers, and insurers; pricing varies widely so compare.