1. What Is Gap Coverage Car Insurance?

Gap coverage (Guaranteed Asset Protection) is an optional car insurance that covers the difference between what you owe on your car loan/lease and the car's actual market value in case of total loss.

2. How Does The Calculator Work?

The calculator uses the simple formula:

Where:

• \( Finance \) — Outstanding loan/lease amount (MYR)
• \( Market \) — Current market value of the vehicle (MYR)

Explanation: This calculation shows the potential financial gap that would need to be covered by insurance in case of total loss.

3. Importance Of Gap Coverage

Details: Gap coverage is particularly important for new cars that depreciate quickly, protecting you from having to pay the difference between insurance payout and your remaining loan balance.

4. Using The Calculator

Tips: Enter your current outstanding finance amount and the current market value of your vehicle in Malaysian Ringgit (MYR). Both values must be valid positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Who needs gap coverage in Malaysia?
A: Anyone with a car loan/lease where the outstanding amount exceeds the vehicle's current market value, particularly for new vehicles.

Q2: How is market value determined?
A: Insurance companies typically use industry guides and vehicle condition assessments to determine market value at time of loss.

Q3: When is gap coverage most valuable?
A: During the first 2-3 years of a new car's life when depreciation is highest relative to loan repayment.

Q4: Does gap coverage cost extra?
A: Yes, it's an additional insurance product that comes with separate premium costs.

Q5: Is gap coverage mandatory in Malaysia?
A: No, it's optional but highly recommended for those with significant car loans.