If you finance or lease a new vehicle in Ohio, gap insurance could save you thousands if your car is totaled. Here’s how it works and when it makes sense.
What Is Gap Insurance?
Gap insurance (Guaranteed Asset Protection) covers the difference between your vehicle’s actual cash value (ACV) at the time of a total loss and the remaining balance on your loan or lease. New vehicles depreciate quickly — a car loses 15–25% of value in the first year.
When Gap Insurance Makes Sense in Ohio
- You financed more than 80% of the vehicle’s value
- Your loan term is 60 months or longer
- You lease your vehicle
- You made a down payment of less than 20%
- You rolled negative equity from a previous loan
Gap Insurance vs. New Car Replacement in Ohio
Gap insurance covers the loan balance shortfall. New Car Replacement coverage (available in some policies) goes further — it pays to replace your totaled car with a brand new equivalent model, not just the ACV.
Gap Insurance vs. New Car Replacement
| Feature | Gap Insurance | New Car Replacement |
|---|---|---|
| Covers loan shortfall | Yes | Yes |
| Replaces with new vehicle | No | Yes |
| Typical annual cost | $20–$40 | $50–$100 |
| Required by lender | Sometimes | No |
Get a Free Quote Today
Financed a new vehicle in Ohio? Jeff Smith State Farm can help you understand whether gap insurance or new car replacement coverage is right for your situation. Call (740) 354-7747 or contact Jeff Smith online for a no-obligation insurance review.
