: You put down less than 20% of the car's price.
: Most lease agreements benefit from or even require gap insurance because depreciation often outpaces your payments. should you buy gap insurance
: You bought a luxury vehicle or a model known for losing value quickly. : You put down less than 20% of the car's price
: Gap insurance pays the remaining debt to your lender so you aren't stuck paying for a car you no longer own. When You Should Buy It : Gap insurance pays the remaining debt to
: You drive significantly more than average, which accelerates the car's loss of value. When You Can Skip It You likely do not need gap insurance if: Should You Buy Gap Insurance for Your New Car?
Buying gap insurance is a strategic financial decision that depends on whether you are "underwater" on your vehicle loan—meaning you owe more to your lender than the car is actually worth.