Little or no down payment
If you put down less than about 20%, you may owe more than the car is worth for a good part of the loan.
For new-car buyers
New car? Protect yourself from the gap.
A new car loses value fast, while your loan or lease balance goes down slowly. If the car is totaled or stolen, your auto insurance pays what the car is worth, not what you owe. Gap insurance covers the difference, so you don't keep paying for a car you no longer have.
Free, no-obligation quote from a licensed Florida agent. English, Spanish, Russian.
Message us on WhatsApp
What is gap insurance?
Gap insurance pays the difference between what you still owe on your loan or lease and the car's actual cash value (what it was worth right before the loss) if the car is totaled or stolen and not recovered.
It works together with your auto policy's collision and comprehensive coverage. Your auto insurance pays the car's value first, and gap coverage helps pay the balance that's left on your loan or lease.
How the gap can happen
- You still owe on your loan
- $32,000
- Actual cash value of the car after a total loss
- $26,000
- The gap you would still owe the lender
- $6,000
Without gap coverage, that $6,000 would come out of your pocket, even though the car is gone. Gap insurance is designed to pay that difference. Depending on the policy, your auto deductible may not be included.
Who should think about gap insurance?
Loans of 60 months or longer
Longer loans pay down the balance slowly, so the gap can last for years.
Leases
You are responsible for the lease balance if the car is totaled. Some leases already include gap coverage, so check your contract.
Cars that lose value fast
Some models depreciate faster than others, especially in the first couple of years.
A balance rolled over from your last car
If you added what you owed on your old car to the new loan, you start out owing more than the car is worth.
What gap insurance doesn't cover
Gap coverage is only for the difference after a total loss or theft. It usually does not pay for:
- Repairs when the car isn't a total loss (that's your collision or comprehensive coverage)
- Mechanical breakdowns, maintenance or warranty repairs
- Missed or late loan payments, late fees or other charges
- Extended warranties and other add-ons rolled into your loan (often excluded)
- Your auto deductible (in many policies)
- Injuries or damage to other people or their property (that's your liability coverage)
ℹ️ Every policy has its own terms and limits. We'll go over what yours includes before you decide.
Gap insurance questions
Can I add gap insurance after I already bought the car from the dealer?
Often, yes. Many auto policies let you add gap coverage after the purchase, but there are usually limits, such as how new the car is and whether you are the original owner. The rules vary, so it's best to call us soon after you buy.
Do I need gap insurance on a lease?
Many leases already include gap coverage, so first check your lease contract. If yours doesn't, it's usually worth having, because a leased car often starts out worth less than what you owe on the lease. We can look at your contract with you.
Is the dealer's gap coverage my only option?
No. Dealers often offer gap coverage (sometimes called a GAP waiver) and add it to your loan, which means you may also pay interest on it. You can also ask about adding gap coverage to your auto insurance. We'll explain the options so you can compare before you sign.
How fast can you add gap insurance?
In many cases we can take care of it the same day once we have your VIN and your loan or lease details. It depends on the car and the policy, and we'll tell you right away whether it can be added.
Do you help with the claim if my car is totaled or stolen?
Yes. Call us first. We'll help you open the claim, gather what's needed (like the payoff statement from your lender and the settlement from your auto insurance) and follow the gap part of the claim with you until it's done.
Ask about gap insurance for your new car
Leave your name and number. A licensed agent will call you back and explain your options in plain language.
📞 (305) 859-3953