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Guaranteed Asset Protection (GAP) insurance helps when your financed or leased car is totaled or stolen and your insurer’s payout is less than what you still owe on the loan or lease. GAP covers that “gap,” so you are not stuck paying for a vehicle you no longer have. It works alongside your full coverage (collision and comprehensive) and does not replace required liability coverage. To compare rates, you can also check car insurance quotes in Louisville, KY.
If your vehicle is totaled, your collision or comprehensive coverage pays the car’s actual cash value (ACV). If you owe more than the ACV, GAP insurance pays the difference, minus any deductible and exclusions.
GAP purchased through an insurer typically adds $50–$150 per year to your policy. Dealer-sold GAP can cost more as a one-time fee. Comparing options can save money.
Decide whether GAP is worth it for your situation.
If you’re financing or leasing in Louisville, GAP can be smart protection during the early years of ownership.
While Kentucky does not mandate GAP insurance, many leasing companies require it. If you finance, your bank may strongly recommend GAP during the first years when depreciation is steep. Before buying, compare your options with your current carrier or get auto insurance quotes in Louisville to see the total policy cost with GAP added.
GAP fills the difference between your loan balance and the insurer’s actual cash value payout after a covered total loss. It typically does not cover:
You can purchase GAP at the dealership, through your auto insurer, or sometimes via your lender. Buying with your insurer is often cheaper annually than a one-time dealer fee. When comparing options, also review whether you’re carrying the right limits on your full coverage policy.
If your loan-to-value ratio is low or your car has strong resale value, GAP may not be necessary. You can also lower risk by choosing a higher down payment or a shorter term. Once your principal balance drops below estimated value, consider removing GAP and focusing on the right auto insurance limits.
Our team of seasoned specialists is dedicated to offering you dependable guidance and support at every juncture.
We aim to guarantee that you possess a lucid comprehension of your choices and the terms linked to your insurance policies.