Gap insurance for a leased car

Loan and lease gap coverage can save the day if your vehicle is totaled in an accident. Without this add-on coverage, you could end up with an undrivable car and a lease to pay.

What is depreciation?

The moment you drive a vehicle off the sales lot it loses value. This is known as depreciation. On average:

Green car icon, 20 percent of the icon shaded gray.

A car is worth about 20% less than the original value just one year after purchase.



Green car icon, 60 percent of the icon shaded gray.

Within the first five years, most cars lose about 60% of their original value.





What is gap insurance?

Grange loan and lease gap coverage protects you by covering the “gap” between what your auto policy covers and what you owe on your loan.

If you have a loan or lease you may owe more money than your car is worth. If you get into an accident and your vehicle is unrepairable, a standard auto insurance policy will only reimburse you for the value of the vehicle.


A vehicle door is damaged from an accident.

For example: You’re in a covered accident and your vehicle is considered unrepairable. You owe $20,000 on the loan, but the value of the vehicle is $15,000. After your $500 auto insurance deductible, your policy will pay $14,500 for a total of $15,000, which is the actual value of the vehicle. If you have gap coverage it will cover the $5,000 difference to pay off your loan. If not, you will be responsible for the difference.

 

How do I know if I need gap insurance?

Ask your independent agent about gap coverage if either of these questions apply to you. Do you:

  • Drive a loaned or leased vehicle?
  • Owe more than your car’s market value?
Woman smiles as she drives and talks on a cell phone.

Coverage to bridge the gap

Ask your independent agent if adding loan and lease gap coverage to your Grange auto insurance policy is the right choice for you.

Find an agency

Available coverages and discounts may vary by state. Please contact your Grange Independent Agent to discuss coverage details, discounts and eligibility requirements. For specific coverage details, always refer to your policy. If the policy coverage descriptions herein conflict with the language in the policy, the language in the policy applies.