Gap Coverage (Loan and Lease Payoff)
Gap coverage helps when your car is totaled or stolen and you still owe more on your loan or lease than the car is worth. It may pay the difference after your primary coverage pays the car’s actual cash value, so you are not left paying for a vehicle you no longer have. It usually works alongside collision and comprehensive.
Gap coverage helps when your car is totaled or stolen and you still owe more on your loan or lease than the car is worth. It may pay the difference so you are not stuck paying for a car you no longer have.
What does gap coverage cover?
- The gap between your vehicle’s actual cash value and your remaining loan or lease balance.
- Applies after a covered total loss or theft, once your primary coverage pays the car’s value.
- Often works alongside collision and comprehensive.
Who needs it? Drivers who financed with a small down payment, took a longer loan term, or lease their vehicle. New cars can lose value quickly, so early in a loan you may owe more than the car is worth.
Gap coverage usually works only alongside collision and comprehensive, since those coverages pay the car’s value first. Once you owe less than your car is worth, gap coverage may no longer be needed.
How we help: We help you decide whether gap coverage fits your loan or lease terms, and we coordinate it with your collision and comprehensive coverage so there are no gaps in the gap protection itself.
