What does gap insurance mean and what does it cover?

Gap insurance (Guaranteed Asset Protection) covers the difference between what you owe on a financed or leased vehicle and what it's actually worth if it's totaled or stolen. When a car is declared a total loss, your regular auto insurance pays out the vehicle's current market value, which depreciates quickly—especially in the first few years. If you owe more than that payout, you're responsible for the gap. Gap insurance bridges that shortfall so you're not stuck paying thousands on a car you no longer own. This protection matters most when you finance a vehicle with a smaller down payment, take a longer loan term, or buy a car that depreciates fast. For example, if you put $2,000 down on a $25,000 car and it's totaled six months later, the insurance company might pay $20,000 while you still owe $23,000—that $3,000 gap is your problem without this coverage. Many lenders require gap insurance on financed vehicles, and it's typically cheaper to add it upfront than to buy it later. When you're financing a vehicle through Elite Edge, we shop multiple lenders who often include gap insurance as part of their loan packages or offer it at a low cost during approval. It's worth asking about during your application process, especially if you're putting down less than 20% or financing for 60+ months. Reach out to us at (954) 907-2386 or complete the 60-second Pre-Qualify at eliteedgeautobroker.com/PreQualify to discuss your loan structure and what protections are available.

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