When added to a finance agreement, it amends the agreement to include gap insurance. That means you agree to obtain (or have already obtained) gap insurance on your financed vehicle.
Why have gap insurance?
It is an important coverage to have on leased or financed vehicles, as it helps to cover the financial “gap” between your car’s actual cash value (
) and the amount left due on your loan if the vehicle is stolen or totaled.
It is common for new vehicles to depreciate in value rather quickly after purchase, so gap coverage can provide extra protection to keep you from paying your remaining loan balance out of pocket.
Pro tip: If you don’t have an emergency fund or thousands of dollars on hand, it’s actually a smart insurance product to have—and it typically only adds a couple extra bucks per month to your premium.
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.