Many Arizona drivers assume full coverage is enough when financing or leasing a vehicle. But in the event of a total loss—due to theft, accident, or disaster—the payout from standard auto insurance may not cover the remaining loan or lease balance. This is where gap insurance becomes essential. Premier Choice Insurance helps Arizona drivers close that financial gap, ensuring they aren’t left responsible for thousands in unpaid debt.
What Is Gap Insurance?
Gap insurance, short for Guaranteed Asset Protection, is designed to cover the difference between a vehicle’s actual cash value (ACV) and the remaining balance on a loan or lease. Since cars depreciate rapidly—often losing 20% or more of their value within the first year—standard policies often fall short in total loss situations.
Why Is Gap Insurance So Important for Leased or Financed Vehicles?
When leasing or financing, drivers are insuring not just the vehicle but also a financial commitment. If the vehicle is totaled or stolen and the insurance payout doesn’t cover the full loan amount, the driver is responsible for paying the difference out of pocket.
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Here’s a real-world example:
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A driver buys a car for $30,000 using a loan. Six months later, the car is totaled in an accident. The market value has dropped to $24,000, but the remaining loan balance is $28,000. Standard insurance pays the $24,000. Gap insurance covers the $4,000 difference, protecting the driver from financial hardship.
Who Needs Gap Insurance the Most?
According to the team at Premier Choice Insurance, gap insurance is highly recommended for drivers who:
- Lease their vehicle (often required in lease agreements)
- Finance a car with a low down payment
- Choose long-term loan terms (60 months or more)
- Drive vehicles that depreciate quickly
- Roll negative equity from a previous loan into a new one
For these groups, gap insurance isn’t just helpful—it’s a smart financial safeguard.
What Does Gap Insurance Cover?
Gap insurance generally protects in the following situations:
- Total loss from an accident
- Total loss due to theft
- Damage from natural disasters (fire, flood, etc.)
- Vandalism resulting in a total loss
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It’s important to note that gap insurance doesn’t cover late payments, extended warranties, or rollover from previous loans unless clearly stated in the policy.
Is Gap Insurance Expensive?
Not at all. Whether purchased through a dealership, lender, or an insurance broker for financed and lease cars like Premier Choice Insurance, gap insurance is typically very affordable—often just a few dollars a month. The protection it provides is well worth the cost, especially when compared to the financial burden of paying off thousands of dollars in remaining loan or lease balances after a total loss.
Can Drivers Cancel Gap Insurance?
Once the loan balance drops below the vehicle’s market value—meaning you’ve gained positive equity—gap insurance may no longer be needed. At Premier Choice Insurance, we help Arizona drivers monitor their loan-to-value ratio and adjust their coverage accordingly. While reviewing your policy, we can also explore other ways to save—such as asking if safe driver discounts lower auto insurance. The answer is yes, and we’re here to ensure you get every discount you deserve.
Get the Right Protection with Premier Choice Insurance
Gap insurance can be confusing, but it doesn’t have to be. Premier Choice Insurance makes it easy for Arizona drivers to understand their options and make confident decisions. Their team evaluates each driver’s loan or lease details and helps build a policy that fits both their budget and vehicle protection needs.
Ready to Protect Your Vehicle Investment?
Whether a driver just leased a car or is halfway through a financing agreement, it’s never too late to protect their investment. Premier Choice Insurance offers personalized gap insurance quotes designed to prevent financial surprises after a total loss.
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Contact Premier Choice Insurance today to get started and secure peace of mind behind the wheel.
FAQs About Commercial Car Insurance
Business car insurance covers vehicles used for work purposes beyond commuting, offering higher liability limits and coverage for equipment carried in the vehicle. Personal car insurance covers vehicles used primarily for personal activities.
Yes, Premier Choice Insurance offers the option to insure multiple vehicles under one business car insurance policy, making management and payment simpler and often more cost-effective.
Rates are influenced by the type of vehicles, how they are used in your business, driving records of employees, and the levels of coverage selected.
Premier Choice Insurance offers non-owned vehicle insurance as part of its business car insurance policies, which covers employees using their personal cars for business activities.
Maintaining a clean driving record, choosing higher deductibles, and taking advantage of multi-policy discounts can help reduce your business car insurance costs.
Additional coverages include rental reimbursement, roadside assistance, and uninsured/underinsured motorist coverage.
Yes, business car insurance premiums are typically tax-deductible as a business expense.
Contact Premier Choice Insurance to update your policy whenever you acquire a new vehicle for business use. This ensures that all your vehicles are covered without interruption
While you can cancel your policy at any time, it is important to consider the potential risks and ensure you have alternative coverage if necessary.
Claims are handled promptly and efficiently. You should report any incident as soon as possible, and a dedicated claims representative will guide you through the process.
About Premier Choice Insurance
Premier Choice Insurance, headquartered in the heart of Mesa, AZ, stands at the forefront of delivering comprehensive business insurance solutions tailored to the unique needs of companies across Arizona. As an esteemed independent insurance agency, we aim to safeguard your business’s future, ensuring peace of mind against life’s unforeseen events.
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Our dedication to excellence is reflected in our wide-ranging services, including but not limited to general liability insurance, commercial property insurance, professional liability (errors and omissions) insurance, workers’ compensation, and commercial auto insurance. We specialize in crafting customized insurance packages that align perfectly with your business’s requirements, ensuring robust protection for your assets, employees, and operations.
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Premier Choice Insurance offers access to an impressive portfolio of over 50 reputable insurance carriers. This vast network enables us to provide our clients with competitive pricing and diverse coverage options, making us a premier choice for insurance in Mesa and throughout Arizona. Our local market expertise and industry-specific knowledge allow us to offer effective and cost-efficient advice and solutions.
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Our team at Premier Choice Insurance is driven by a commitment to integrity, transparency, and unmatched customer service. We understand the complexities of insurance and strive to make the process as straightforward and hassle-free as possible. From risk assessment consultations to claims support, we stand by our clients every step of the way.
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As active members of the Mesa community, we believe in giving back and are involved in various local initiatives and non-profits. This community focus reflects our belief that businesses thrive in a supportive and engaged environment.
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Premier Choice Insurance offers a blend of local expertise, personalized service, and comprehensive solutions for business owners seeking a trusted partner to navigate the complexities of insurance coverage. We are not just your insurance agency but your ally in business resilience and success.
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Discover how Premier Choice Insurance can protect what matters most. Contact us today to learn more about our services and how we can tailor the perfect insurance strategy for your needs.
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Visit our Mesa, AZ, Insurance Office today.
