What Is GAP Insurance and Why Do You Need It in New Zealand?

When buying a car—whether new or used—most people focus on getting the right finance deal and making sure the vehicle is covered by comprehensive insurance. But what happens if your car is written off in an accident or stolen? That’s where GAP Insurance (Guaranteed Asset Protection Insurance) comes in.

What Is GAP Insurance?

GAP Insurance is an additional level of protection that covers the difference between what your car insurance pays out and what you still owe on your car loan in the event of a total loss.

For example:

• If your car is declared a write-off and your insurer pays out $15,000, but you still owe $20,000 on your loan, GAP Insurance covers the $5,000 “gap.”

• Even if you don’t have finance owing, GAP can still protect you from out-of-pocket costs such as replacement expenses or other fees that standard insurance won’t cover.

Why Is GAP Insurance Important?

Many car buyers don’t realise that the moment you drive away, your vehicle begins to depreciate. In fact, your comprehensive insurance payout is usually based on the market value, which may be lower than your outstanding finance.

Without GAP Insurance, you could end up paying off a car loan for a vehicle you no longer own.

Key Benefits of GAP Insurance

• ✅ Extra protection in the event of a total loss

• ✅ No need to keep making payments on a car you can’t use anymore

• ✅ Cover for up to 60 months with just one premium

• ✅ Optional benefits to help reduce unexpected out-of-pocket expenses

Who Should Consider GAP Insurance?

GAP Insurance is particularly valuable if:

• You financed your car with little or no deposit

• You took out a long-term car loan

• You bought a newer model vehicle that depreciates faster

• You want peace of mind knowing your loan will always be protected

How MIG CARS Can Help

At MIG CARS, we want every customer to enjoy a safe and stress-free ownership experience. That’s why we work with Assurant Vehicle Care to offer GAP Insurance alongside our vehicles. Whether you’re buying your first car, upgrading to a family SUV, or financing a hybrid, GAP Insurance ensures you’re not left with unexpected costs if the worst happens.