Gap insurance is ideal for individuals who have financed or leased a vehicle and owe more than its current market value. It’s particularly useful for those with a small down payment or who have a high-interest loan, as these factors can contribute to owing more than the car is worth in the event of an accident or theft. New car buyers, who experience rapid depreciation, or those with long-term loan agreements are prime candidates for gap insurance. Additionally, if you’re leasing a vehicle, the leasing company may require it. Gap insurance covers the difference (the “gap”) between the car’s current market value and the outstanding loan balance, protecting you from financial loss. Without it, you may still owe the remainder of the loan, even if the car is totaled. For individuals who want peace of mind and financial security in these situations, gap insurance can be an essential purchase.