Nissan Finance: Gap Insurance Coverage

Nissan offers Guaranteed Auto Protection Insurance (GAP) to protect customers from financial losses in the event their vehicle is stolen or totaled and their insurance policy doesn't cover the full cost of the vehicle. Gap insurance covers the difference between the actual cash value of the vehicle and the loan balance, which can be significant due to depreciation. This type of insurance can be purchased at the time of vehicle purchase or lease from the dealership, as part of a regular insurance payment from an auto insurer, or from a third-party insurer that offers gap insurance. The cost of gap insurance is generally low, with an average cost of $20 per year when added to an existing policy, and between $200 and $300 as a one-time fee for a standalone policy.

Nissan Security+Plus Gap Protection

If your vehicle is stolen or totaled, gap insurance will cover the difference between the amount you still owe on your lease or loan and the vehicle's actual cash value. This coverage is typically up to a threshold determined by your policy. It's important to note that gap insurance does not cover repairs, a down payment on a new vehicle, rental car fees, or any interest, fees, or penalties accrued.

When to Consider Gap Insurance

Gap insurance may be a good idea if you meet certain criteria:

• Your down payment was 20% or less.
• Your financing term is 60 months or longer.
• You're in the early stages of a vehicle lease or are about to enter one.
• You have rolled over negative equity from a previous car loan into a new loan.

Cost of Gap Insurance

The cost of gap insurance can vary depending on how you obtain it. If added to your regular insurance policy, the average cost is around $20 per year. As a standalone policy, it can cost between $200 and $300 as a one-time fee. If obtained through your lender, the fee can range from $500 to $700, often wrapped into your car loan.

How to Purchase

There are a few ways to purchase gap insurance:

• At the time of purchasing your vehicle from a dealership.
• As part of your regular insurance payment from your auto insurer.
• From an insurer that offers gap insurance.

It is recommended to review your contract or contact your dealership to determine if you have gap insurance and explore your options.

Gap insurance cost as part of your regular policy

Gap insurance is an optional type of car insurance that covers the difference between what a car is worth and what the driver owes on their auto loan or lease if the car is stolen or declared a total loss. This type of insurance is useful if you've made a small down payment, have a long-term loan, or your car depreciates quickly.

Gap insurance costs between $20 and $40 per year when added to a car insurance policy. This is significantly cheaper than purchasing gap insurance from a dealership, which can cost between $400 and $700.

Some insurers do not offer gap insurance as part of an existing policy, only as a standalone policy. Therefore, it is important to check with your insurance company if they offer this type of insurance.

When deciding whether to purchase gap insurance, consider the following:

• The cost of gap insurance as part of your regular policy
• The likelihood of needing gap insurance, based on factors such as the size of your down payment, the length of your loan, and the depreciation rate of your car
• The potential financial impact if you do not have gap insurance and your car is stolen or totalled

When you might need gap insurance

Gap insurance is meant for unexpected events, such as your car being stolen or totaled. Gap insurance coverage may apply if you owe more than the car is worth at that time.

You should consider getting gap insurance if any of the following apply to you:

• Your down payment was 20% or less.
• Your financing term is 60 months or longer.
• You are entering or in the early stages of a vehicle lease.
• You have rolled over negative equity from a previous car loan into a new loan.
• You owe more on your car loan than the car is worth.
• Your car loan or lease requires gap insurance.

Gap insurance is not necessary if you own your car outright or if you owe less on your car than its current actual cash value.

Where to purchase gap insurance

There are several options for purchasing gap insurance. Firstly, you can buy it from the dealer when you buy or lease a car. The dealer will likely offer you gap insurance as part of the financing options. However, this option can be more expensive as the cost of coverage is usually bundled into your loan amount, resulting in you paying interest on the gap coverage.

The second option is to purchase gap insurance from your auto insurance company. You can add gap coverage to an existing policy or a new policy, provided your loan or lease hasn't been paid off. This option is generally more affordable, as you won't pay interest on the coverage.

The third option is to buy gap insurance from an insurer that specialises in this type of coverage. This option may be suitable if you don't already have car insurance or if your current insurer doesn't offer gap insurance. Some popular gap insurance providers include Progressive, Nationwide, State Farm, and Allstate.

It's worth noting that gap insurance is typically optional when financing a car purchase, but it might be mandatory if you're leasing a vehicle. Additionally, you can usually drop the coverage once your vehicle is worth more than your remaining loan balance, as the "gap" between the car's value and what you owe no longer exists.

How to know if gap insurance is included in a lease

Gap insurance is an optional product sometimes required by the terms of your lease or loan agreement. It 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. It is meant for the unexpected—if your car is totaled or stolen, gap insurance coverage may apply if you owe more than the car is worth at that time.

Some car dealerships and lessors automatically add gap insurance as part of your loan agreement/payments. To know if gap insurance is included in your lease, read through your lease agreement to determine whether or not you already have gap coverage.

If you are a lease customer of Nissan, gap insurance isn't always necessary to be procured on leases. Some finance companies, including NMAC, include this coverage in the base contract terms. To find out more about the Gap Waiver, contact Nissan's Insurance Department at 1-800-777-7525.

If you are unsure whether you need gap insurance, consider the following:

• You made less than a 20% down payment
• You financed for 60 months or longer
• You leased the vehicle (carrying gap insurance is generally required for a lease)
• You purchased a vehicle that depreciates faster than average
• You rolled over negative equity from an old car loan into the new loan

Frequently asked questions