GAP (Guaranteed Asset Protection) insurance is a type of optional coverage that protects you financially if your vehicle is totaled or stolen and you owe more on your loan than the car's current market value.

 

Standard auto insurance only pays out the vehicle's actual cash value (ACV) at the time of loss, which can leave a "gap" between that payout and your remaining loan balance.

 

GAP insurance steps in to cover that difference.

• Covers the difference between insurance payout and remaining loan balance

• Especially helpful for vehicles that depreciate quickly

• Applies to both leased and financed vehicles

• Peace of mind if you owe more than the car is worth

 

Why Adding GAP Insurance to Your Loan is Smart
GAP insurance can easily be rolled into your monthly auto loan payment, making it affordable and convenient. Without it, if your car is declared a total loss, you could be left paying off a loan for a vehicle you no longer have. It's particularly valuable in the early years of your loan when depreciation is steep.

• Affordable monthly cost when included in your loan

• Protects you from financial loss after a total loss or theft

• Recommended for low down payments or long-term loans

• Helps avoid out-of-pocket expenses on a totaled vehicle

 

What Happens to Your Old GAP Policy if You Refinance?
When you refinance your auto loan, your original GAP policy typically becomes void because it was tied to the initial loan terms and lender. This means you’ll need to secure a new GAP policy with your new lender or through a third party. The good news is you may be entitled to a refund on the unused portion of the original policy.

• Original GAP policy ends when the loan is refinanced

• Adding a new GAP policy is always recommended if needed

• Potential refund from the old GAP provider (request it in writing)