Auto Loan Protection (GAP)
Protect Your Automobile Investment
Make the Smart MOVE, don’t leave your vehicle investment unprotected. Think about it, vehicle prices continue to increase and at the same time, many borrowers want longer loan terms and are making smaller down payments. For these reasons it’s typical for a vehicle’s outstanding loan balance to be significantly higher than its actual cash value, especially during the first few years of the loan.
If your vehicle is totaled or stolen, your insurance settlement will be based on the vehicle’s actual cash value, not the outstanding loan balance. This may create a deficiency balance or “gap”. You could be stuck paying hundreds – or even thousands – of dollars out of your own pocket to pay off the deficiency balance.
Now you can protect your vehicle investment with Guaranteed Asset Protection (GAP). GAP is designed to eliminate your unpaid net loan/lease balance in the event your vehicle is stolen or damaged beyond repair (totaled).
GAP supplements your primary auto insurance coverage. You can benefit from GAP whether you finance or lease a new or used vehicle. It covers automobiles, vans, light trucks, motorcycles, boats up to 15 feet in length, jet skis, and snowmobiles.
GAP coverage goes into effect when you need it most when your vehicle is stolen and isn’t recovered, or is totaled in an accident and can’t be repaired.
GAP covers the difference between your primary insurance carrier’s settlement and the outstanding loan or lease balance, less delinquent payments, late charges, refundable service warranty contracts, and other insurance-related charges. Included in this difference is your insurance deductible, up to $1,000.*
How GAP Works for You
- Original Purchase Price: $18,000
- Loan Balance After One Year: $16,000
- Vehicle's Current Value1: $11,000
- Net Insurance Settlement: $10,000
- GAP Pays the Difference: $6,000**
GAP pays the difference between the loan balance ($16,000) and net insurance settlement ($10,000).
Add GAP Coverage
*Deductible benefits are available in most, but not all states. Please consult your financing representative for the availability of this benefit.
1Vehicle's current value as determined by your insurance company.
**Your deductible is included in the GAP settlement amount up to $1,000. Without deductible coverage, the GAP settlement would be $5,000. GAP information cited from Allied Solutions.