Extra insurance the leasing company provides to cover you if your car is ever wrecked or stolen. The gap is the difference between how much it would cost to replace your car and the amount you would have to pay the leasing company to get out of your lease. The captive finance companies (like GMAC and Ford Motor Credit) tend to include it for free. Other companies might try to charge you, but see if you can get them to throw it in for free.
This coverage provides protection to the insured in cases where the vehicle is worth less than the loaned or leased value of that vehicle. This typically occurs early in a lease or loan period, when early depreciation is greater than the downpayment made on the vehicle.
A plan that provides you financial protection in case your leased vehicle is stolen or totaled in an accident. There are two types of gap coverage. One is a waiver by the lessor of the gap amount if the vehicle is stolen or totaled. The other is a contract by a third party to cover the gap amount. Under either type, you may remain responsible for the insurance deductible and for other amounts deducted from the insured amount of the vehicle by your insurance company.
A type of insurance coverage that covers the difference between the payoff of the lease or loan and the amount covered by other insurance coverage, when a vehicle is damaged or stolen during the term of the lease or loan. Most gap coverage requires that the lessee (or borrower on a loan) not be in default under the terms of the lease or loan.
Insurance for a lessee designed to cover the difference in selling price between a vehicle's actual cash value, and the payout left on a lease.