Paul Sanchez
BMW does offer gap insurance, which can help pay the difference between what you owe on your loan or lease and your vehicle's actual cash value (ACV) if your car is deemed a total loss. However, it is not clear if all BMW leases include gap insurance as standard. Some sources suggest that gap insurance is included in lease agreements, while others state that it can be purchased separately if not included. It is always best to carefully review the terms of your lease contract and consult with your insurance company or broker to determine if gap insurance is included and if additional coverage is needed.
| Characteristics | Values |
|---|---|
| Do BMW leases have gap insurance? | It depends on the lease. Some BMW leases include gap insurance, while others do not. |
| What is gap insurance? | Guaranteed Asset Protection insurance. It covers the difference between your car's current value and loan balance in the event of a disaster, such as a total loss. |
| What does gap insurance cover? | Accidents (car wrecked or totalled), Acts of God (hurricane, tornado, wildfire, flood, etc.) |
| What does gap insurance not cover? | Total losses due to fraudulent, dishonest, and illegal acts (i.e. intentional damage, DUI), any amount exceeding the gap coverage limits, any amount owed due to late fees, due date changes, and deferred or delinquent payments, rental fees incurred while your car is in the shop, negative equity rolled over into a new car loan, refinanced the original payment agreement |
| Who should get gap insurance? | People who paid less than a 20% down payment, people who purchased a model that depreciates quickly, people whose loan term is longer than 60 months, people who drive more than average, people who lease a BMW |
| Is gap insurance worth it? | Yes. BMW and luxury cars, in general, rapidly decrease in value due to several factors, such as the increasing popularity of leasing and high ownership costs. |
| How much does gap insurance cost? | As low as $20 per year. Dealerships also offer gap coverage for a one-time fee of $400 to $700. |
What You'll Learn
BMW gap insurance covers up to $50,000 after a covered loss
BMW GAP insurance is most useful in the first 2-3 years after you purchase your car, as vehicles depreciate the most in the first few years. BMW GAP insurance can cover financed vehicles for up to 84 months. It also covers up to $1,000 of your insurance deductible and up to 150% of the vehicle's actual cash value.
It's worth noting that GAP insurance is not required by law and is different from collision insurance, liability insurance, and comprehensive auto insurance. It is also distinct from extended warranties offered by dealerships. GAP insurance only takes effect after your car is totalled or stolen and when there is a difference between your car's current market value and the amount you owe on your auto loan.
While BMW does offer its own GAP coverage, called the Ultimate Protection GAP, administered by Safe-Guard International Products, GAP policies can vary by BMW Retailer, lender, and the state where you purchase the car. Therefore, it is important to carefully read the lease contract and understand the specific terms of your GAP insurance coverage.
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BMW gap insurance can cover up to 150% of the vehicle's value
BMW gap insurance can be a valuable addition to your standard auto insurance. It covers the difference between your car's current value and loan balance, ensuring there are no out-of-pocket costs for you in the event of a total loss. This can be especially useful if you've made a low down payment, have a long loan term, drive a lot, or lease a BMW—all factors that increase the likelihood of being "upside down" on your loan.
BMW gap insurance covers up to $50,000 after a covered loss and can protect your vehicle for up to 84 months. Notably, it can cover up to 150% of the vehicle's actual cash value or MSRP/NADA value. This means that if your BMW is declared a total loss, gap insurance will cover the difference between the insurance payout and either 150% of the vehicle's value or the remaining loan balance, whichever is greater. This provides valuable peace of mind and financial protection in the event of an accident, natural disaster, or vehicle theft.
For example, let's say you purchased a BMW 5 Series sedan with a loan of $49,500 after a 10% down payment. After a year, you've reduced the loan balance to $39,600, but due to depreciation, the car's value has decreased to $38,500. In this case, without gap insurance, you would be responsible for the $1,100 deficit. However, with BMW gap insurance, the full cost of the loss is covered, and you won't have to pay anything out of pocket.
The cost of BMW gap insurance is relatively affordable, with prices as low as $20 per year. Dealerships also offer gap coverage, but it tends to be more expensive, typically costing between $400 and $700 as a one-time fee. It's important to note that gap insurance is optional and not required by law, but it can provide valuable financial protection in the event of a total loss.
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BMWFS lease includes gap insurance
BMW Financial Services (BMWFS) lease does include Guaranteed Asset Protection (GAP) insurance. GAP insurance covers the difference between the depreciated value of a car and the amount still owed on the lease or loan. This is particularly important in the event of a total loss, where the car is written off or stolen. GAP insurance covers the "gap" between the market value of the vehicle and the lease residual, plus what is remaining on the lease account balance.
GAP insurance is included with BMWFS, but not all lenders include it. It is worth reading the lease contract carefully, as the details may differ from state to state. BMWFS lease contracts include a "Gap Amount" Waiver, which states that the lessee will not be obligated to pay the gap amount if the vehicle is damaged, stolen, or destroyed and considered a total loss under their insurance coverage. BMW gap insurance covers up to $50,000 after a covered loss and can cover financed vehicles for up to 84 months.
It is important to note that GAP insurance only pays out when a car is totaled or stolen; it cannot be claimed for any other reason. GAP insurance can be purchased from dealerships or lenders and added to a loan or lease, or it can be purchased from car insurance companies as an add-on to an existing policy. Purchasing GAP insurance through an insurer is usually the cheapest option, costing around $3 per month, whereas a GAP insurance policy from a dealership costs $400 to $700.
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Gap insurance is not required for financing a purchase
However, gap insurance is still an option for those financing a BMW purchase and can be added to your existing policy. It is worth considering if you have a low down payment, a long-term loan, or a car that depreciates quickly. Gap insurance covers the difference between the compensation you receive after a total loss of your vehicle and the amount you still owe on a car loan. This can be especially useful if you've made a small down payment on your vehicle, have a long-term loan, or have a car that depreciates quickly.
Gap insurance is not required by state law, but it may be required by lenders and lessors. It is also worth noting that gap insurance is different from replacement value insurance or new car replacement insurance, which gives you money for a brand-new car of the same make and model, regardless of its depreciated value, if it is stolen or totaled.
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BMW gap insurance covers your insurance deductible
Gap insurance is an optional, supplementary policy that covers the difference between your car's current value and loan balance. It is designed to protect you financially in the event of a total loss, which can occur if your car is stolen, wrecked, or destroyed in a natural disaster.
While gap insurance is not required by law, it can provide valuable peace of mind and financial protection. It is especially useful if you have a long loan term, a low down payment, or a car that depreciates quickly, such as the BMW 5 and 7 series.
In the case of a total loss, BMW gap insurance waives the difference in coverage, ensuring that you are not left with a large bill. It covers up to $50,000 of the "gap" due to a total loss, provides $1,000 coverage for the primary insurance deductible, and covers up to 150% of the vehicle's MSRP/NADA value.
BMW gap insurance is included in some lease contracts, so if you are leasing a BMW, be sure to carefully review your lease contract to see if gap insurance is already included. It is also worth noting that gap insurance only applies if you are in compliance with your insurance obligations under the lease.
Overall, BMW gap insurance can provide valuable financial protection and peace of mind, ensuring that you are not left with a large bill in the event of a total loss.
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Frequently asked questions
BMW leases generally include gap insurance, but it's best to check your contract carefully. In the US, gap insurance is usually included in lease agreements.
Gap insurance covers the difference between your car's current value and the loan balance. It is also known as Guaranteed Asset Protection (GAP). It is an optional, supplementary policy that ensures there are no out-of-pocket costs for you in the event of a total loss.
If your car is declared a total loss, your insurance provider will write a cheque for the vehicle's actual cash value (ACV). Gap insurance covers the "gap" between this amount and the remaining loan balance.
Gap insurance costs around $3 per month when added to your car insurance policy. Dealerships also offer gap coverage, but it can be pricey, with a one-time fee of $400 to $700.
