Protection for the Unexpected
When you finance a vehicle, its value begins to depreciate the moment you drive it. In many cases, vehicles depreciate faster than the loan balance decreases.
If your vehicle is totaled or stolen, your insurance company will typically pay the current market value. That amount may be less than what you still owe on your loan.
GAP protection, which stands for Guaranteed Asset Protection, helps cover that difference.
How GAP Coverage Works
GAP protection is typically added at the time of financing, making it easy to include as part of your overall loan structure.
If a covered loss occurs and your insurance payout does not fully pay off your loan, GAP protection steps in to cover the remaining balance, up to the terms of the agreement.
Without GAP, that remaining balance would still be your responsibility, even though you no longer have the vehicle.
This coverage is designed to protect you from that situation, helping you avoid an unexpected financial burden.
When to Consider GAP
GAP protection is often considered when a loan balance is likely to exceed the vehicle’s value for a period of time.
This can happen with smaller down payments, longer loan terms, or vehicles that depreciate more quickly.
It’s also worth considering if you want added financial protection and predictability, especially in the early years of your loan.
You don’t have to guess whether GAP is right for you. Our team is here to help you weigh the pros and cons based on your situation.