What Does Gap Insurance Cover?

Man Signing Paperwork


When you are buying a new car from Haldeman Lexus of Princeton there will be a variety of financing and insurance options for you to choose from. Gap insurance is one of the optional coverages. What does gap insurance do? What does gap insurance cover? Well, it is designed to cover the gap between the owed amount on the car and the true cash value of the car at the time of an accident. Our finance team at Haldeman Lexus of Princeton discusses the details of this insurance coverage, and how it can benefit your Princeton, NJ area drives.

What Does Gap Insurance Do?

What does gap insurance cover? You know it’s the space between the owed amount and true cash value—this is a pretty vague description, though, and it’s understandable because gap insurance covers a variety of issues. One thing Hamilton, NJ drivers should keep in mind is that it covers damage to your vehicle, and not the property or bodily injuries. With that, here’s exactly what gap insurance does, and doesn’t, cover:

Gap Insurance Covers:

  • Theft
  • Fire
  • Vandalism
  • Accident
  • Acts of nature (tornado, hurricane, flood, etc.)

Gap Insurance Does NOT Cover:

  • Deductible (though some gap insurance policies allow this)
  • Engine failures and other mechanical repairs/malfunctions
  • Death
  • Extended warranties

Gap insurance is meant to cover total loss in the event of an accident. Though it is an optional coverage, it is worth talking with your insurance company about what it offers you, because, oftentimes, you can get a good deal.

Do I Need Gap Insurance?

You don’t need gap insurance. It is highly recommended that you get gap insurance when purchasing a new car, though. Gap insurance is especially helpful if your dealership offers a plan that includes deductible coverage. If not, the fees for gap insurance are often very low, or even can be a small one time payment. Having this insurance will give you peace of mind, and help you save money, in the unfortunate event of an accident. Speak with our financing team to talk about buying gap insurance.

Check Out Insurance and Finance Options at Haldeman Lexus of Princeton

Whether you’re ready to purchase your next Lexus vehicle, it’s beneficial to have the knowledge about various insurance plans. Make sure you understand exactly what you want and need before purchasing a car. The right coverage can save you time and money down the road. Visit us today in Lawrenceville, or simply contact us online with any questions you may have!

More from Haldeman Lexus of Princeton

  • Explore Lexus AWD Models

    Complete your trips around Princeton, NJ with a model that has capable performance and excellent handling from the Lexus AWD-equipped lineup. Explore the variety of AWD sedans, coupes, and SUVs with the team at Haldeman Lexus of Princeton. You may be wondering, “what’s so special about Lexus all-wheel drive?”   Each vehicle equipped with a Lexus AWD system is…

  • 2022 Lexus RX 350 Interior

      If you’re shopping around Princeton, NJ for a luxury crossover with roomy dimensions, lavish appointments, and advanced technologies, you’re shopping for the Lexus RX 350. The Lexus RX 350 interior features top-shelf amenities and cutting-edge technologies, while implementing the Takumi design philosophy. As for the 2022 Lexus RX 350 interior dimensions, you and your passengers…

  • How Much Can a Lexus GX Tow?

      What would a luxury vehicle be if it weren’t powerful as well? You’ll realize the two go hand in hand when you see the 2022 Lexus GX 460 towing capacity. How much can a Lexus GX tow? With the right equipment, the Lexus GX towing capacity tops out at 6,500 pounds. Of the vehicles…

Sales Hours:

Haldeman Lexus of Princeton 40.2625258, -74.7204518.