Guaranteed Asset Protection (GAP) offers protection against financial liability when financing a new or used vehicle. It protects against financial loss in the event that the vehicle is damaged beyond repair (totaled), or stolen and never recovered. With GAP, the covered deficiency balance is then waived.
Driving a new vehicle without GAP is like taking a leap of faith. Your automobile insurance will cover damages in the event of an accident, but if your vehicle is declared a total loss or is stolen, there's no safety net to protect you from financial hardship.
Within the first two or three years of ownership, your new vehicle will depreciate faster than the loan/lease balance. A significant gap can exist between the amount your insurance company will pay and the amount you still owe.
How GAP Works
Note: This graph is provided as an example only. The actual payoff may vary.
GAP could save you thousands of dollars that would otherwise be an out-of-pocket expense. This affordable coverage costs only pennies per day and bridges the gap between what you owe and what your insurance company will pay, protecting you from unnecessary risk. For example, if your loan/lease balance is $20,000 but your insurance company will only pay $16,000, GAP will pay the $4,000 difference.
If you're planning to buy a new automobile or have recently purchased one, ask your loan/lease representative about GAP. It's easy to enroll and there is no cash down; the cost can even be included in your monthly payments.
Easy Claim Process
First, report your claim to your primary insurance company or agent. If your vehicle is determined to be damaged beyond repair (totaled), or stolen and never recovered, and there is a gap between your insurance company's settlement and your loan/lease balance, please report the claim to us, your lender. You will need to provide a copy of your insurance company's settlement and, in the case of theft, a copy of the police report.
Why Gap Protection?
In addition to paying the difference between your insurance settlement and loan/lease balance, GAP also:
- Covers your financing agreement for the entire loan or lease term.
- Delivers risk protection from total loss or unrecovered theft.
- Offers coverage up to $50,000.
- Pays your auto insurance deductible, up to $1,000, in cases of total loss.
- If you finance state taxes and license fees, up to 120% of MSRP, that's covered as well.
- No separate cash payment is needed; simply add the cost of GAP to your automobile loan/lease.
Underlying auto insurance on the vehicle must be in force and maintained to be eligible for GAP coverage. GAP is cancelable within the first 30 days. After 30 days, the cancellation refund is computed in accordance with GAP cancellation provisions. Please refer to the Debt Cancellation Agreement for complete details.