GAP( Guaranteed Asset Protection) FAQ
1. What is guaranteed asset protection (GAP)?
Guaranteed Asset Protection (GAP) is similar to an airbag for your automobile loan. GAP Insurance may help fill the gap between what your vehicle insurance will have to pay and what you owe on your loan if deemed a potential loss. This help cover unexpected costs if your vehicles is deemed a total loss by your insurance company
2 .How does GAP Insurance work?
GAP Insurance protection is an annulment or renunciation of your remaining loan balance with your credit union or bank. GAP is in addition to any payout you receive from comprehensive or clash coverage through your auto insurance if your car is totaled or stolen and not recovered. Several GAP Insurance products will also cover your insurance deductible.
3. What GAP Insurance covers?
New and/or used automobiles are often eligible for GAP Insurance
4. What GAP Insurance does not cover?
5. How does GAP Insurance work with depreciation?
A new vehicle loses value the once it is drive off the lot. Instantly the new loses approximately 10% of its value. By the end of the year, that car will lose an additional 10% on average.
Usually, auto insurance pays only what an automobile is determined to be worth at the time of loss. When you owe more on your loan or lease than the estimated value of the vehicle, GAP covers the difference.
6. Do you really need GAP Insurance?
You should purchase GAP Insurance for vehicles that tend to lose their value quickly, or if you have invested in a loan or lease in which you owe more than the vehicle is worth.
You can buy a GAP waiver or insurance policy in several different ways at the time you buy your vehicle, through a variety of different companies:
Including GAP Insurance payments into your auto loan spreads your payments out over time rather than paying one big sum, which can be benificial and more financially sustainable. Do nott forget that if you add the coverage to your loan, you will also be paying interest on GAP Insurance.
GAP protection is entirely refundable within the first 30 days. After that, it is dependent upon the terms of your agreement or policy.
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