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GAP Insurance and Vehicle Protection During Your Refi

How to Add GAP Insurance and Vehicle Protection During Your Refi


Refinancing your auto loan isn’t just about lowering your monthly payment—it’s also a perfect opportunity to add valuable protections like GAP insurance and vehicle service contracts. These add-ons can safeguard your investment, save you from unexpected expenses, and often cost less when bundled into your refinance. In this blog, we’ll walk you through how to add these protections during your refinance, why they matter, and how to avoid costly dealer plans.


What Is GAP Insurance and Why You Need It


GAP (Guaranteed Asset Protection) insurance covers the difference between what you owe on your car loan and the actual cash value of your vehicle if it’s totaled or stolen. Without GAP insurance, you could be stuck paying out-of-pocket for a car you no longer have, especially if you owe more than the vehicle’s worth (a situation called being “upside down” on your loan).


Many dealer GAP plans are overpriced and often require you to buy them upfront or finance at high rates. When you refinance, you can choose to add GAP insurance at a lower cost, bundled into your new loan, which spreads out payments and saves money.


What Is Vehicle Protection and Why It’s Worth Adding


Vehicle protection plans, also known as vehicle service contracts or extended warranties, cover costly repairs beyond your factory warranty. These plans can include major components like your engine, transmission, electrical systems, and more. They often come with perks such as roadside assistance, rental car reimbursement, and even free maintenance.


Adding this protection during your refinance means you won’t face large, unexpected repair bills. Plus, by bundling the cost into your monthly payment, budgeting becomes easier since all your car-related expenses are consolidated.


How to Add GAP Insurance and Vehicle Protection When You Refinance

  1. Discuss Your Options Early: When you start the refinance process with your lender—like Digital Auto Refi Co—ask about adding GAP insurance and vehicle protection plans. They can explain coverage levels and costs upfront.

  2. Review the Coverage Details: Make sure you understand what’s included, such as deductibles, coverage limits, and any exclusions. Compare with what you may already have on your current loan or through your insurer.

  3. Choose the Right Plan: Based on your vehicle’s age, mileage, and your financial situation, select the protection that fits your needs and budget. Some lenders offer tiered plans so you can customize coverage.

  4. Bundle Into Your Loan: The cost of these protections is rolled into your refinance amount, so your monthly payment will reflect the added coverage. This avoids large upfront fees or separate bills.

  5. Finalize Your Refinance: Once you agree on the terms, complete your refinance application and sign the new loan documents. Your new loan will include the protection plans you selected.


How to Cancel Overpriced Dealer GAP and Protection Plans


If you already have dealer GAP insurance or extended warranties that feel too expensive, refinancing is a chance to switch to a better deal. Most GAP plans can be canceled within a certain period, and any unused premiums are typically refundable.


To cancel dealer plans:

  • Contact the dealer or insurance provider directly and ask about their cancellation policy.

  • Submit a written request if needed.

  • Keep track of your refund and ensure it’s credited back to your account or paid directly to you.

Once canceled, you can replace those protections with lower-cost plans through your refinance, saving money and often getting better coverage.


Final Thoughts


Adding GAP insurance and vehicle protection during your auto refinance is a smart way to protect your investment and your wallet. Bundling these protections into your loan through a trusted lender like Digital Auto Refi Co can save you money, simplify payments, and give you peace of mind.


If you’re ready to refinance and want to learn more about adding GAP or vehicle service contracts, contact us today or start your application online. Protect your car—and your finances—on your terms.


 
 
 

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