Should You Buy Gap Insurance On New Car -

Dealerships often charge a flat fee of $500 to $1,000 for GAP insurance.

If your $40,000 car is totaled three months later, your insurance company might only pay out $34,000. If you still owe $38,000 to the bank, you are on the hook for that $4,000 difference. GAP insurance steps in to pay that bill. When You Should Buy It should you buy gap insurance on new car

Most lease agreements actually require GAP insurance (and many include it automatically). Dealerships often charge a flat fee of $500

GAP (Guaranteed Asset Protection) insurance covers the difference between your car’s market value and the remaining balance on your loan or lease. 000. If you still owe $38