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Have you recently leased a new vehicle? GAP Insurance is require by law in the state of New York and recommended to Washington residents by Prostar Insurance.. The latter being most important of course! You might need GAP(Guaranteed Auto Protection) if..

  • You purchased a new car and didn’t have a substantial down payment– at least 20% and perhaps as much as 50%.
  • You’re leasing a car.
  • You financed your car for more than four years.
  • You rolled debt from your last car into your current auto loan.

Here’s an example. You buy or lease a car for around $25,000. Several months down the road, it’s totaled, but your insurance check covers only the car’s current value, which is about $20,000. Not only do you have to find new wheels, but you’re on the hook to the finance or lease company for a gap of about $5,000.

Volatility in resale prices started last year, when gas prices spiked, hurting sales and values of bigger, gas-guzzling cars, said James Clark, the general manager for ALG, which publishes the Automotive Lease Guide.

“Across the board, we’re seeing a severe decline in resale performance,” Clark said. “Conditions really deteriorated quickly.”

Retained value for 3-year-old models
Model ’05 model in 2008 ’06 model in 2009 Change
Toyota Tundra 59.5% 40.1% -19.4%
Infiniti QX56 58.0% 40.3% -17.7%
Hummer H2 55.0% 37.5% -17.5%
Toyota Sequoia 59.1% 42.0% -17.1%
Industry average 47.6% 39.4% -8.2%

Source: Automotive Lease Guide



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