Why You Don’t Need Gap Insurance

If you’re leasing a car, you may be on the hook for this coverage. Otherwise, just say no.

Do I need “gap insurance” when I buy a new car? The dealer is offering it for about $600.

You may be required to include gap coverage in your monthly payments if you lease a vehicle, but otherwise you’re better off self-insuring.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.