Glossary
Add-on insurance
Insurance products sold alongside a car loan (payment protection, GAP, mechanical breakdown cover), often financed into the loan itself, so they accrue interest too.
By Leverage Finance · Updated 17 July 2026
Add-ons are typically offered in the same sitting as the loan: payment protection insurance (covering repayments if you lose income), GAP insurance, and mechanical breakdown insurance. Each can have legitimate uses. The problems are pressure and financing: products agreed to in a hurry, added to the loan balance, quietly accruing interest for the whole term.
When you refinance, the add-ons don't automatically follow the loan. It's a natural moment to ask what each one costs, what it actually covers, and whether you'd buy it again on purpose. Some are worth keeping; some were only ever worth it to the person selling them. Our guide to red flags in your current loan shows how to spot them.
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