Gap Insurance: Nissan Lease Protection

If you have a Nissan lease, you may be wondering if you have GAP insurance. GAP insurance, or Guaranteed Auto Protection Insurance, is a supplemental insurance policy that covers the difference between the remaining loan balance and the vehicle's insured value in the event of a total loss. This type of insurance is typically offered by Nissan and other financial institutions to protect individuals from financial disaster if their vehicle is stolen or totaled. While GAP insurance is not always necessary for leases, some finance companies, including Nissan Motor Acceptance Corporation (NMAC), include this coverage in the base contract terms. To find out if you have GAP insurance on your Nissan lease, carefully review your contract or contact your dealership. It is important to understand your insurance coverage and be prepared in case of any unexpected events.

Do Nissan leases include GAP insurance?

If you have leased a Nissan vehicle, you may be wondering if GAP insurance is included in your lease. GAP insurance, or Guaranteed Asset Protection insurance, can provide financial protection in the event that your leased car is totaled or wrecked. It covers the difference between what your insurance company pays out and what you still owe on the lease.

So, do Nissan leases include GAP insurance? According to some sources, Nissan leases do include GAP insurance at no extra charge. This means that if your leased Nissan vehicle is totaled or destroyed, Nissan will accept the insurance loss proceeds as full satisfaction of your early termination liability, provided you meet certain conditions. These conditions typically include having satisfied your insurance obligations under the lease, having a policy that covers the casualty, and having paid the deductible required by your policy.

However, it is always a good idea to carefully review your lease contract and confirm with your dealership or Nissan directly to ensure that GAP insurance is included in your specific lease agreement. The specific terms and conditions of GAP insurance coverage may vary, and it is important to understand the details of your particular policy.

Additionally, it is worth noting that leasing a vehicle from Nissan typically comes with certain mileage restrictions and expectations of regular maintenance. Leasing may be more suitable for those who drive less than 15,000 miles per year and take good care of their vehicles. If you plan to drive more than this or desire the freedom to customize your car, purchasing a Nissan may be a better option.

When is GAP insurance necessary?

GAP insurance is an optional, additional coverage that can help certain drivers cover the difference between the financed amount owed on their car and the car's actual cash value (ACV) in the event of a covered incident where their car is declared a total loss. GAP stands for 'Guaranteed Auto Protection' or 'Guaranteed Asset Protection'.

GAP insurance is necessary when:

• You owe more on your car loan than the car is worth. If you are currently making car loan payments, calculate the loan balance and weigh it against your car's current cash value. If there is a gap, you should consider GAP insurance.
• Your car loan requires GAP insurance. Some loan providers require GAP insurance from the outset of your loan, regardless of what you owe.
• Your lease requires GAP insurance. Many auto leases require GAP insurance as a protective measure. Some lease providers may already include GAP insurance in the price of the lease.
• You have a long finance period.
• You made a small down payment. If you didn't make a large down payment, you'll be upside down as soon as you drive off the lot. It may take several years of reducing your car loan balance before the loan amount and the car's actual value begin to balance.
• You've traded in an upside-down car and added the amount you still owe to your new car loan.
• You've bought a car that doesn't have great resale value. If you've bought a car that loses value quickly, there is a good chance you'll be upside down unless you've made a substantial down payment.
• You plan to rack up the miles quickly. Few things reduce a car's value faster than lots of driving.
• You've taken out a car loan with a long term (more than 60 months). It takes longer than usual to hit the break-even point, where your loan balance and the car's value begin to equalise.

In general, most new car buyers benefit from GAP coverage while the vehicle is less than three model years old.

How much does GAP insurance cost?

The cost of GAP insurance varies depending on where you buy it. Dealerships and banks typically charge a one-time fee of $400 to $700 for GAP insurance, making it the most expensive option. This fee is usually added to your auto loan, so you will also have to pay interest on it.

The best deals on GAP insurance are generally available from car insurance companies, which charge as little as $3 per month, or $20 to $40 per year, for coverage. Instead of charging a lump sum, insurers include the cost in your regular premium payments.

According to the Insurance Information Institute, GAP insurance typically costs a few dollars a month or around $20 a year. Your cost depends on individual factors, such as your car's value. You will also need to buy comprehensive and collision coverage in addition to GAP insurance.

To find the best deal, compare car insurance rates from at least three insurers.

How does GAP insurance work?

GAP insurance, or Guaranteed Asset Protection insurance, is an optional add-on product that covers the difference between the amount you owe on your auto loan and the amount your insurance company pays out if your car is stolen or deemed a total loss. This type of insurance is intended to protect you from financial disaster in the event that your vehicle is stolen or totaled, and your insurance policy does not cover the full cost.

When you lease a car, you may owe more on the vehicle than it is worth at the time. This is because cars depreciate in value over time, and if your car is stolen or written off, standard auto insurance will only pay out the value of the vehicle at that time. GAP insurance covers the difference between this payout and the remaining loan amount, protecting you from having to pay off a loan for a vehicle you no longer own.

For example, if you owe $25,000 on your loan and your car is only worth $20,000, GAP insurance will cover the $5,000 gap, minus your deductible. This helps you avoid being left with a large bill for a vehicle you can no longer use.

GAP insurance is offered by Nissan and other financial institutions. It is included in some lease contracts, such as those from NMAC, but it is not always necessary to procure it separately when leasing. However, it is important to review your contract or contact your dealership to confirm whether you have GAP insurance as part of your lease agreement.

How do I know if I have GAP insurance?

If you have a Nissan lease, there are a few ways to find out if you have Guaranteed Auto Protection (GAP) insurance. Firstly, you can review your lease contract or contact your dealership to inquire about the inclusion of GAP insurance. Some lease contracts from Nissan include GAP insurance as part of their base contract terms, so it is essential to carefully review the terms and conditions of your lease agreement. This type of insurance is typically offered as an optional add-on or as part of the monthly loan payments.

If you obtained your lease through Nissan Motor Acceptance Corporation (NMAC), it is likely that GAP insurance is included in your lease. Several sources indicate that NMAC includes GAP insurance in their lease agreements to protect their assets. However, it is always a good idea to confirm this with your specific lease details.

Additionally, you can check your car insurance policy to see if GAP insurance is listed as one of the coverages. Car insurance documents usually have a page outlining the different types of coverage included in your policy. If you are unsure, you can contact your insurance agent or company to verify if GAP insurance is part of your coverage.

It is important to note that GAP insurance is meant to protect you financially in the event of a total loss of your vehicle. It covers the difference between the remaining loan balance and the vehicle's insured value, which can save you from significant out-of-pocket expenses if your car is stolen or totaled.

Frequently asked questions