What is Gap Insurance and Is It Worth it?
Learn about gap insurance for a new car and why you may want to consider it.
Q. When I purchased a new car recently, the dealership tried to sell me Gap Insurance. What exactly is gap insurance? And is it necessary?
A. Many insurance companies offer Gap Insurance, or Lease/Loan Gap Coverage, when you finance a car purchase or lease. The policy fills the financial gap if your car is worth less than what you have to pay off, and it can potentially save you thousands of dollars.
Let’s say you still owe $15,000 on your car loan when you total your vehicle. An auto insurance company pays you $10,000 — the car’s current value. That’s a gap of $5,000, which you’re responsible for.
With Lease/Loan Gap Coverage, your insurer pays that difference. The coverage applies to vehicles that are purchased or leased. Call MetLife Auto & Home for more information and to compare prices with your dealer’s quote.