What is gap insurance and do I need it?

May 28, 2009 at 4:33 pm

Whether you lease or finance your car, gap insurance can provide valuable protection during the early years of your car’s life. As we all know, a new car’s value drops the minute you drive it off the lot. And unfortunately, if your car is totaled five minutes after you buy it, your insurance generally only covers the actual cash value of the car. So, there’s a good chance the insurance check isn’t enough to pay off your outstanding lease or loan balance, unless your insurance company offers Guaranteed Replacement coverage.


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If someone borrows my car, are they covered under my auto insurance?

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