GAP Frequently Asked Questions
1. What is GAP?
GAP stands for Guaranteed Asset Protection. GAP is a voluntary, non-insurance product designed to waive the remaining loan balance not covered by the borrower’s primary insurance carrier settlement in the event of a total loss or un-recovered theft, subject to limitations and exclusions, including but not limited to loan-to-value (LTV) maximum, delinquent payments, late charges, refundable service warranty contracts, and other insurance-related charges.
2. What does GAP cover?
GAP covers the difference between the borrower’s outstanding loan balance and the actual cash value (ACV) of the vehicle up to the maximum LTV%. GAP may also cover up to $1,000.00 of the borrower’s deductible if there is a “gap” after the primary insurance settlement is paid.
Your financed vehicle is totaled beyond repair…
Your loan balance is $15,000
Your Insurance company settlement is $10,000 (Based on your vehicle’s market value $11,000)
Less your insurance deductible of $1,000
Loan balance remaining without protection $5,000
Loan balance remaining with protection $0.00
Plus $1,000 credit towards the financing of your replacement vehicle when financed through our institution!!
3. What are the benefits?
- May help you, the borrower, avoid financial hardship and afford a replacement vehicle.
- No model, mileage, or year restrictions.
- May prevent a deficiency balance from being added to a new loan.
- May protect your credit rating.
- $1,000 towards the financing of a replacement vehicle.
4. Can I cancel the GAP Insurance?
You may cancel the GAP Insurance within the first 60 days for a full refund. After 60 days from the date of issue, the protection is nonrefundable.
5. Do I have to have GAP Insurance?
No one can predict what will happen after you purchase your new vehicle, but we can prepare for whatever may happen. GAP Insurance is not a requirement in obtaining a vehicle loan. However, if you have financed up to 100% of the vehicle value, GAP Insurance might be a good idea. In most circumstances, a vehicle is worth a lot less the second it is driven off the lot. Also, in more cases than not, the value of a vehicle rapidly declines during the first few years of ownership.
6. How much is GAP?
GAP prices vary from institution to institution and dealership to dealership. Your GAP Insurance can be written into the vehicle loan and therefore could only cost you a few extra dollars each payment. If you would like more information on our GAP Advantage program, please call us at 419-448-0191!