What is Loan or Lease Gap Insurance?
Loan/lease gap coverage may help protect you from having to make payments on a totaled car while you still owe money on a loan or lease. Most new cars lose value the second they’re driven off the dealer’s lot. In some cases, this can be by several thousands of dollars.
If you financed your car or leased it, you could owe more than what your car is worth.
This can become financially significant if your new car is damaged beyond repair in a covered accident soon after purchase.
Loan/lease gap coverage helps pay for the depreciation of your car. It covers the “gap” between your car’s current value and how much you paid for it. Eventually, the gap between what you owe on your car and its market value will diminish. Regularly keep track of these two figures. If you owe less than the car is worth, you may no longer need gap coverage.
Is Gap Insurance Mandatory in NJ?
Gap coverage is not required by the state of New Jersey. It can be a smart purchase – especially for those with a new car. Some lenders may require that you purchase it when you finance or lease a car.
How much is Gap Insurance in NJ?
Protecting your newer car with gap insurance is more affordable than you might think. Plymouth Rock customers only pay an average of $43* for gap coverage on their car insurance premium.
Is Gap Insurance Taxable in NJ?
The purchase of gap coverage, when provided by the lease company, is subject to sales tax. However, gap coverage provided by a third party insurer like Plymouth Rock Assurance is exempt from sales tax.
When Should Coverage on my Vehicle Begin?
Coverage should start before you drive your new car off the dealer’s lot. You’ll want to ensure your car is covered from the moment you take possession of it. Our local agents or insurance professionals will be able to advise you on what other coverages you may need.
Now Let’s Talk About You
Do you have the right coverage for your vehicle? We’d love to chat with you about it. Call us at 855-993-4470 or speak to a local agent.
If you’d rather not talk, you can get a quote quickly and easily online. Just enter your ZIP code to get started and see how much you could save!
*Average gap premium for Plymouth Rock customers as of December 2022.
The information on this page is for educational purposes only and is not a statement of contract. Actual coverage is subject to the language of the policies as issued by your insurer. Certain restrictions and limitations may apply. Review your policy and consult with a licensed insurance professional to learn more about your coverage.
