Gap Insurance

If my leasing contract doesn’t include gap insurance, should I get it? Is gap necessary for leasing a car?

It can be added to your regular insurance for very little. Don’t get a policy from the dealer. Most of those are nothing but scams with most of the money going to the dealer.

“Is gap necessary for leasing a car?”

The only necessary insurance is the minimum coverage stipulated by state law. Additional policies and premiums are up to the discretion of the owner/driver.

There may be no good reason for you to continue your existing coverage, especially if it was provided by the dealer. Your contract might only specify that you have coverage, period. So it may be to your advantage to cancel your policy and replace it with coverage obtained on your own. Visit a GEICO, Natiowide, Allstate, etc., office and talk to a sales rep. Bring up the gap coverage as well. You are almost certain to be offered a much better deal.

I am not sure about how it works with leasing, but with buying it really depends on your car. Gap insurance covers the difference between the car’s worth and what you owe. If your car doesn’t depreciate as fast as others, it is totally unnecessary. I bought my car new with only $500 down. It was never worth less than I owed because it is a car that holds its value.

If something catastrophic happens, like the car gets stolen and totalled, and you are upside down in the loan (you owe more than it is worth), you will be responsible for the difference. So if you owe less than the car is worth, Gap insurance totally useless.

With a lease, you really need to find out what you are liable for if something catastrophic happens to the car. Will the terms of the lease require you to keep making lease payments? Will your normal insurance satisfy all of your liabilities? The answer really depends on the terms of the lease.