Do I Need GAP Insurance on a Leased Car?
Getting into an auto accident can be one of the most difficult struggles of our lives. Finding a reliable car repair facility, dealing with auto insurance companies, and recovering physically and mentally are just a few of the more trying things after car accidents. If you’ve been in an accident in the Eagle Rock, Los Angeles, Pasadena and Glendale area, you can count on the trusted experts at CarTek Collision to carefully and diligently evaluate your vehicle and its damages. And if you’re driving a leased vehicle, look at why it’s a good idea to buy gap insurance on a leased car now rather than later.
What Is GAP Insurance?
GAP stands for “guaranteed auto protection” and is a type of auto insurance that protects you from winding up upside down on your vehicle if you get into a wreck. The value of a vehicle depreciates over time. If you total your car in an accident and discover that the amount you still owe in car payments is greater than the car’s value at the time of the incident, you’re upside down on your car and are still responsible for paying the remaining amount.
GAP insurance offers a way out of this scenario because it covers the difference between your car’s actual value and the amount you still owe in payments. When you total your vehicle, your regular auto insurance pays you the actual cash value of your car at the time, without regard for how much you have left to pay on it. GAP insurance bridges this “gap” by paying you the difference between how much you owe on your vehicle and how much it’s worth.
How Does a Car Lease Work?
Leasing a car is essentially another way of saying you’re renting a car. The amount you pay in monthly lease installments is based on the projected depreciation of the vehicle and is the total of the amount of depreciation. So, if you’re looking at leasing a vehicle that’s worth $20,000 at the beginning of your lease term, but is expected to only be worth $12,000 at the end of your term, you’ll be making payments on the $8,000 difference.
Why You Need GAP Insurance on a Leased Car
GAP insurance on a leased car is an absolute must because those driving leased vehicles often find themselves upside down on their loans if the car is stolen or an accident totals the car. Leased vehicles depreciate very rapidly, so if you still have a good chunk of your lease payment left when the accident occurs, it’s likely that you’ll owe more on the lease than the car was worth at the time of the accident. Here are a few important things to keep in mind when considering leasing a car and purchasing GAP insurance:
Contact the Experts at CarTek Collision
CarTek Collision is proud to serve the Eagle Rock, Los Angeles, Pasadena and Glendale area with the best in auto maintenance and repair. If you’ve been in an accident, contact us to see what we can do for you.