Protect Your Auto Investment
GAP Insurance Coverage in Bergen County NJ
Don't get stuck paying for a car you no longer have. GAP insurance covers the difference between what you owe and what your car is worth after a total loss.
What is GAP Insurance?
Guaranteed Asset Protection (GAP) insurance is a crucial coverage that protects you from financial loss when your vehicle's actual cash value is less than what you owe on your loan or lease.
How GAP Insurance Works
Your vehicle is totaled in an accident or stolen
Your standard insurance pays the actual cash value
GAP insurance covers the remaining loan balance
You're not stuck paying for a vehicle you can't drive
Real Example:
Why GAP Insurance is Essential
Covers the "Gap"
Pays the difference between what you owe and your car's actual value
New Car Protection
Essential for new vehicles that depreciate quickly in the first few years
Lease Protection
Often required for leased vehicles to protect against early termination charges
Financial Security
Prevents you from paying thousands out-of-pocket after a total loss
Low Down Payment Coverage
Critical if you financed with little to no down payment
Peace of Mind
Protects you during the years when depreciation outpaces loan payoff
Do You Need GAP Insurance?
GAP insurance is highly recommended in these situations:
New Car Buyers
Vehicles lose 20% of value in the first year
Low Down Payment
Financed 90% or more of purchase price
Long-Term Loans
Loans of 60 months or longer
Lease Customers
Most leases require GAP coverage
Negative Equity Trade-ins
Rolled over debt from previous vehicle
High Depreciation Vehicles
Luxury cars or models with poor resale value
Vehicle Depreciation Timeline
Understanding how quickly vehicles lose value shows why GAP insurance is critical
Drive off lot
Immediate depreciation
Year 1
First year total depreciation
Year 2
Two-year total depreciation
Year 3
Three-year total depreciation
Year 4
Four-year total depreciation
Year 5
Five-year total depreciation
Key Insight: Most vehicles lose 50% of their value in just 5 years. GAP insurance protects you during the critical early years when depreciation outpaces loan payoff.
GAP Insurance Resources
New Car GAP Insurance
Essential protection for new vehicle purchases with rapid first-year depreciation.
Learn MoreLease GAP Coverage
Understanding GAP requirements and options for leased vehicles.
Learn MoreGAP Calculator
Calculate your loan-to-value ratio and determine if you need GAP coverage.
Calculate NowProtect Your Investment with GAP Insurance
Don't risk owing thousands on a vehicle you can't drive. Get GAP insurance coverage today and drive with confidence.
GAP Insurance Questions & Answers
What exactly does GAP insurance cover?
GAP (Guaranteed Asset Protection) insurance covers the difference between what you owe on your auto loan and the actual cash value of your vehicle if it's totaled or stolen. For example, if you owe $25,000 on your loan but your car is only worth $20,000, GAP insurance covers the $5,000 difference.
How long should I keep GAP insurance?
Keep GAP insurance until your loan balance is less than your vehicle's actual cash value. This typically happens around year 3-4 of ownership, but check your loan balance against your car's current value annually. You can cancel GAP coverage once you have positive equity.
Is GAP insurance required for leases?
Most lease agreements require GAP insurance, and it's often included in your lease payment. However, always verify with your leasing company. If not included, you'll need to purchase it separately to avoid potential charges at lease end.
Can I buy GAP insurance after purchasing my vehicle?
Yes, you can typically purchase GAP insurance within the first year of ownership, though some insurers allow it for vehicles up to 2-3 years old. The sooner you buy it, the better, as the gap between loan value and car value is highest early in ownership.
What's the difference between dealer GAP and insurance company GAP?
Dealer GAP is typically a one-time payment added to your loan, while insurance company GAP is paid monthly/annually. Insurance GAP is usually more affordable and can be cancelled anytime. Dealer GAP may offer additional benefits but is often more expensive overall.
Does GAP insurance cover my deductible?
Standard GAP insurance doesn't cover your comprehensive or collision deductible. However, some enhanced GAP policies include deductible coverage. Ask your Midland Insurance agent about GAP options that include deductible reimbursement.