Do I Need GAP Insurance on a Lease?

Leasing is certainly a beneficial way to get into a new Mazda vehicle. However, it can come with questions, such as, “Do I need GAP insurance on a lease?” North Penn Mazda shares all the details.

What’s GAP Insurance?

GAP stands for Guaranteed Asset Protection. The insurance is designed to protect buyers who finance or lease new vehicles. If you have a total loss, from theft or an accident, your insurance will only cover the estimated market value of your vehicle. If you owe more for your vehicle than it’s worth, GAP insurance can bridge the gap.

What Happens If I Wreck My Leased Vehicle?

If you’re in an accident in a leased vehicle, your coverage will depend on the degree of damage. If your vehicle can be repaired, your insurance (or the at-fault driver’s insurance) will cover the repairs.

However, if your vehicle is totaled, your insurance will pay the leasing company the actual cash value of your car. If it’s less than you owe, you’ll be expected to pay the remaining balance on your lease contract out of pocket.

Do I Need GAP Insurance on a Lease?

While the small monthly installments on a Mazda lease is one of their undeniable perks, smaller installments make it easier to go “upside down” on your loan if something goes wrong. GAP insurance can help to make up the difference.

Some leases are available with a GAP waiver instead, which can cancel the remaining balance. Each lease differs, so we encourage you to discuss this add-on with our team when you lease your vehicle.

Lease a New MAZDA Vehicle in Colmar, PA

We make it incredibly easy to lease a new Mazda vehicle at our dealership. We can also help you secure GAP insurance or any other add-ons that you need. Visit North Penn Mazda to get started today!