Anyone participating in a Ford lease program, more commonly called the red carpet lease program, will be required to have some type of GAP insurance on their car or truck, the issue is more likely to be who will pay for it.
Gap Insurance is a type of insurance that is designed to cover any difference between the final value of the vehicle as agreed at point of sale or lease, and its insurance value if it is damaged or destroyed or is a write-off in the event of an accident or total loss.
The logic of this type of insurance is fairly simple. When buying or leasing a new car or truck, or even a used one, it will have a final price. Obviously with a new car or truck its appreciation is quite significant the moment it leaves the showroom. Even a used car will appreciate your time as well.
Ford Lease require Gap Insurance?
If the car or truck was damaged to a point where it was unrepairable, then the insurance company would assess its value at current market rates basing their valuation on its age, condition and mileage. Inevitably they would offer an amount that would be considerably less than its value at point of sale or lease agreement.
This means inevitably there is quite a significant difference between the two figures, which GAP insurance is designed to cover. This will be an additional insurance policy to the normal auto insurance policy and auto insurance requirements that Ford credit will deem it needs to be in effect.
It is in both parties interests to have GAP insurance, and the cost should not be prohibitive, and should be significantly less than would be anticipated or expected given that it is a type of auto insurance. It is not unusual for the dealership to agree to pay for the GAP insurance, but it is simply one area of additional extras that can be negotiated along with all other errors of the lease agreement.