Honda offers leasing options for its range of vehicles, including coupes, sedans, hatchbacks, SUVs, and trucks. Honda's leasing program includes eligible Honda Certified Pre-Owned models. One of the benefits of leasing a Honda vehicle is that it includes Guaranteed Asset Protection (GAP) insurance. This type of insurance covers the cost difference between the outstanding value of the vehicle and what you pay in insurance instalments. This means that if your leased Honda vehicle is considered a total loss or is stolen, GAP insurance will protect your financial interests. Honda GAP insurance provides different protection than Honda Care GAP, and certain exclusions and limitations apply.
Characteristics | Values |
---|---|
What is GAP insurance? | Guaranteed Asset Protection insurance, also known as loan-lease payoff coverage, offers car owners financial protection in the early years of their car's life. |
When do you need GAP insurance? | If you have a loan or lease on your car, GAP insurance might be a good idea. It's particularly useful if you've made a small down payment or no payment at all, or if your loan tenure is four to five years. For leased cars, it's often included in the contract and is a requirement in most cases. |
How does GAP insurance work? | If your car gets totaled by a covered incident (e.g., theft, accident, hurricane, flood, or vandalism), GAP insurance will pay the difference between the outstanding loan on your vehicle and its actual cash value (ACV). |
Honda-specific information | Honda Leadership Leasing includes GAP coverage as standard, protecting your financial interests if the vehicle is considered a total loss or stolen. |
What You'll Learn
Honda lease insurance requirements
If you're leasing a Honda vehicle, you'll need to meet certain insurance requirements to ensure you're adequately covered in case of any incidents or accidents. Here are the key things you need to know:
Minimum Insurance Coverage
Honda Financial Services requires you to maintain specific types of insurance coverage for the duration of your lease. The minimum coverage requirements include:
- Physical damage insurance: This covers any loss or damage to the vehicle. It typically includes deductibles for both collision and comprehensive coverage. The deductibles ensure you're covered in case your leased Honda vehicle is damaged or stolen.
- Comprehensive and collision insurance: This covers a range of incidents, from accidents to natural disasters, depending on the specifics of your policy.
- Public liability insurance: This covers you in case of any bodily injuries or property damage to others. The minimum coverage limits are typically $100,000 for bodily injury per person, $300,000 for bodily injuries per accident, and $50,000 for property damage. Alternatively, you can opt for a combined single limit of $300,000 for bodily injuries and property damage per accident.
Additional Insured and Loss Payee
It's important to list Honda Lease Trust (HVT, Inc. in New York and Virginia) as an additional insured and loss payee on your policy. This ensures that Honda is notified and involved in the claims process if there is any damage or loss to the leased vehicle.
State-Specific Requirements
Insurance requirements may vary depending on the state in which you reside. Be sure to review your lease agreement carefully and consult with your insurance agent to understand the specific requirements for your state. Some states, like Florida and Hawaii, have unique insurance requirements for leased vehicles.
GAP Insurance
While not explicitly mentioned in the insurance requirements, Guaranteed Asset Protection (GAP) insurance is included in Honda leases. This coverage protects you in case your leased vehicle is considered a total loss or is stolen. GAP insurance covers the difference between the outstanding value of the vehicle and what you still owe on your lease, providing financial protection beyond what your comprehensive and collision insurance might cover.
Maintenance and Servicing
As part of your Honda Leadership Lease agreement, you are responsible for maintaining and servicing the vehicle according to the manufacturer's recommendations. This includes following the maintenance schedule and addressing any recall campaigns initiated by the manufacturer. Regular maintenance helps keep your leased Honda in good condition and ensures it retains its value.
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Honda lease GAP insurance
GAP (Guaranteed Asset Protection) insurance, also known as loan-lease payoff coverage, offers car owners financial protection in the early years of their car's life. If your vehicle is written off or stolen, GAP insurance will cover the difference between the remaining loan amount and the car's value. This is especially useful if you owe more on the loan than the car's value.
All Honda leases include GAP insurance as standard. This is provided through the Honda Leadership Leasing program, which offers a wide range of options, including various mileage allowances, flexible terms, and competitive rates. The GAP insurance covers the cost difference between the outstanding value of the vehicle and what you pay in insurance instalments. For example, if your insurance company pays less than the amount it would cost to pay off the car, the GAP insurance will cover the remaining cost.
GAP insurance is not required by law, but it is a good idea to have it if you owe more on your loan than the value of your car. It is also a requirement in most cases for leased vehicles, as it protects your financial interests in the event of a total loss or theft.
Cost of GAP insurance
GAP insurance costs around $20 a year if purchased from an insurance company and bundled with comprehensive or collision coverage. If bought from a lender or dealership, it may cost a one-time fee of $500 to $700.
Honda Leadership Leasing program
The Honda Leadership Leasing program offers flexible leasing options for Honda cars, trucks, and SUVs. It includes Excessive Wear-and-Use or Damage waivers, Guaranteed Asset Protection (GAP) coverage, and the option to buy upfront mileage at a lower cost. The program also offers a guaranteed end-of-lease purchase price, protecting you against market fluctuations.
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Honda lease GAP insurance cost
When leasing a Honda vehicle, Guaranteed Asset Protection (GAP) insurance is included in the lease agreement. This means that you won't have to worry about purchasing it separately, as it is already part of the standard lease package offered by Honda.
GAP insurance provides valuable financial protection for car owners in the early years of a car's life. It covers the difference between the outstanding loan amount on your vehicle and its actual cash value (ACV) in the event of a total loss. This can be especially useful if your car gets totalled by a covered incident, such as theft, an accident, hurricane, flood, or vandalism.
While GAP insurance is included in Honda leases, it's important to understand the terms and conditions to ensure you know what is covered and what isn't. The cost of GAP insurance is typically built into your lease payments, so there may not be a separate fee associated with it. However, it's always a good idea to review your lease agreement carefully to understand the specific details of your coverage.
On average, GAP insurance costs around $20 per year when purchased from an insurance company and bundled with comprehensive or collision coverage. If you choose to buy it from a lender or dealership, you may be charged a one-time fee of about $500 to $700. However, with Honda leases, you don't need to worry about these additional costs as GAP insurance is already included in the lease.
In addition to GAP insurance, Honda's lease program offers other benefits such as flexible terms, various mileage allowance options, and the ability to drive a new car without the high costs typically associated with purchasing a new vehicle.
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Honda lease GAP insurance exclusions
While Honda Leadership Leasing does include Guaranteed Asset Protection (GAP) coverage, there are certain exclusions to the GAP insurance policy.
Firstly, GAP insurance only applies when there is a financial shortfall, i.e., when the actual cash value (ACV) of the vehicle is less than what is owed to the financial company. In other words, GAP insurance covers the difference between the outstanding loan amount and the vehicle's ACV in the event of a total loss or theft. This means that if the ACV of the vehicle is equal to or greater than the outstanding loan amount, GAP insurance will not provide any additional coverage.
Secondly, GAP insurance does not cover additional charges related to the loan, such as finance or excess mileage charges. It is important to note that GAP insurance is not a replacement for comprehensive or collision insurance. It only covers the financial gap between the ACV and the outstanding loan amount in the event of a total loss or theft. Any repairs or maintenance required for the vehicle that are not related to a total loss or theft would not be covered by GAP insurance.
Additionally, GAP insurance does not cover other property or injuries resulting from an accident. It is specifically designed to protect the financial investment in the vehicle and does not extend to any other assets or liabilities.
It is important to carefully review the terms and conditions of the GAP insurance policy to understand the specific exclusions and limitations. While GAP insurance can provide valuable financial protection, there may be certain scenarios or circumstances that are not covered.
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Honda lease GAP insurance vs Honda Care GAP
GAP (Guaranteed Asset Protection) insurance, also known as loan-lease payoff coverage, offers car owners valuable financial protection in the early years of their car's life. When you have a loan or a lease on your car, GAP insurance might be a good way to save money. If a loss occurs on your vehicle, GAP insurance will pay the difference between the outstanding loan on your vehicle and its actual cash value (ACV).
GAP insurance is not required by law, but it is a good idea if you owe more money on your loan than the value of your car. If you've made a small down payment or no payment at all, or if your loan tenure is four to five years, you should consider getting GAP insurance. For those who lease a car, GAP insurance is a must in most cases and is often included in the contract. Another good time to buy GAP insurance is when the car you have purchased tends to lose its value faster than other cars.
Honda lease GAP insurance
Honda Leadership Leasing is one of the best ways to get into a brand-new Honda car, truck, or SUV. The program delivers a wide range of options, including various mileage allowances, flexible terms, and competitive rates. Vehicles leased through the program also have protection under Excessive Wear-and-Use or Damage waivers and GAP coverage. This additional protection allows you to enjoy the driving experience without worrying about whether your vehicle is covered. GAP coverage is included in a lease through the Honda Leadership Leasing program and covers the cost difference between the outstanding value of the vehicle and what you pay in insurance installments. If the vehicle is considered a total loss or stolen, this coverage would protect your financial interests.
Honda Care GAP
Honda Care GAP insurance can protect your leased or financed Honda if it's deemed a "total loss". It is the bridge between your leased or financed car's market value and the remaining balance on your contract. Having GAP insurance can ease your mind when your insurance company writes off your car as a "total loss" after an accident, especially if you're leasing the vehicle. This coverage provides a safety net for your finances that prevents you from spending more on repairs than the car is worth.
Advantages of Honda Care GAP insurance
- Reimburses a balance of up to $50,000 for losses
- Pays out up to 150% of MSRP for new vehicle loan amounts
- Removes the financial risk of negative equity when a car is totaled
- Offers the option for a customer to get a new vehicle with a cleared loan balance
- Protects customers from defaulted loan payments and credit issues
- Provides a cancellation and refund option if the car is sold or traded
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Frequently asked questions
Yes, Honda leases include Guaranteed Asset Protection (GAP) insurance. This covers the cost difference between the outstanding value of the vehicle and what you pay in insurance instalments.
Gap insurance, or Guaranteed Asset Protection insurance, offers car owners financial protection in their car's early years. It covers the difference between the outstanding loan of your vehicle and its actual cash value (ACV).
Gap insurance is required if you've made a small down payment or no payment at all, or if your loan tenure is four to five years. It's also a must for those who lease a car and is often included in the contract.
Leasing a Honda vehicle allows you to get the model of your dreams without spending as much money. It also offers flexible terms, various mileage allowances, and lower payments.
You must maintain insurance coverage for the duration of your lease, including public liability insurance and physical damage insurance. Honda Lease Trust should be listed as an additional insured and loss payee.