Get Directions

4914 S IH 35 Frontage Rd., Austin, TX, 78745

What is Gap Insurance on a Car?

car insurance paperwork with car key

Purchasing a new vehicle from South Austin Nissan is an exciting experience, but before you drive off the lot you’ll need to purchase insurance coverage for your Nissan. While liability insurance is required, other plans like comprehensive insurance and Gap insurance are optional, but can provide additional coverage to San Marcos drivers.

What is Gap protection? Gap insurance helps cover the “gap” between the current value of your vehicle and what you still owe on your vehicle loan at the time of a total loss accident. Due to its low cost and high potential benefits, many drivers and insurers consider Gap insurance worthwhile. Learn more about if Gap insurance is worth it and what Gap insurance is on a car with the South Austin Nissan finance team below.

What Does Gap Insurance Cover?

Gap insurance is also known as Guaranteed Asset Protection, and is an optional insurance package sold at many Round Rock insurers. Unlike Liability insurance, Gap insurance helps you pay off the remainder of your car loan if your vehicle is written off as a “total loss” by your insurer after an accident. Read below to see what’s covered by Gap insurance protection:

Gap Insurance Covers:

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

Whether your vehicle is damaged in an accident or an environmental disaster, Gap insurance will cover the cost between what your insurance will pay and the current cash value of your vehicle. For example, if you took out a loan for $30,000, but your vehicle is only worth $20,000 at the time of your accident, Gap insurance will cover the remaining $10,000. This coverage applies whether you have a lease or a loan on your vehicle.

Is Gap Insurance Worth it?

Gap insurance is not a required form of auto insurance, however, it’s highly recommended by insurers, lenders, and South Austin Nissan customers. Gap insurance has a low yearly cost, and it’s potential benefits make it worth the extra payment. Read below to see why many drivers believe Gap insurance is worth it:

  • Your vehicle will depreciate in value the minute you drive off the lot.
  • Accidents can happen at any time as you drive in Lakeway. It could be a year after you purchase your car or the very next day.
  • Many insurance companies will only cover what your vehicle is worth at the time of the accident, potentially leaving you with a large loan payment.
  • Gap insurance will cover the difference if your new vehicle is totaled or stolen and you owe more than its current worth.
  • Gap insurance has a low cost and is easily provided by many area insurers.

There are many ways to purchase Gap insurance in the Austin area, and some auto insurance companies may offer Gap insurance coverage for as little as $20 a year. You can purchase Gap insurance from area dealerships, car-loan companies, and other insurers. Call ahead to confirm your chosen provider offers Gap insurance coverage, then discuss your coverage options with them!

Explore Our Other Car Buying Tips

Now that you have a better idea of what Gap protection is, browse our other car buying tips for information on buying vs. leasing and what the MSRP is on a new or used vehicle. If you have any questions about Gap insurance coverage or any other type of insurance your vehicle needs, don’t hesitate to contact our team. We’re here to answer all your questions about the car buying process!

More from South Austin Nissan

  • Juneteenth Celebration and Cookout

    Juneteenth is a holiday to celebrate the freedoms of each American and commemorate the progress we’ve made on inclusion and equality.  The South Austin Nissan team invites you to a celebratory cookout this Saturday, June 19th from 11 AM to 2 PM. We’ll be grilling hamburgers and hotdogs for our two South Austin locations and…

  • Memorial Day Luau

    Join South Austin Nissan for a Memorial Day Luau! We’re celebrating with great food on Saturday, amazing deals all weekend, plus plenty of celebrating with a parking lot party. Stop by to visit with our friendly team and check out the latest Nissan models! Check out our current inventory or schedule your service appointment. Visit us…

  • Customer Appreciation Weekend

    Join South Austin Nissan for Customer Appreciation Weekend! We’re celebrating with amazing deals all weekend, plus a cookout on Saturday. Enjoy a complimentary hamburger or hotdog with your test drive or Certified Nissan service! Check out our current inventory or schedule your service appointment. Visit us at our main location, 4914 S IH 35 Frontage Road,…

South Austin Nissan 30.2063114, -97.7593884.