GAP covers the deficiency balance on your loan in the event of a total loss of your vehicle.
In the event of theft or total loss of your vehicle, most insurance companies only pay the Cash Value of the vehicle at the time of the loss. Your remaining loan balance could be much greater than the Cash Value of your vehicle creating a deficiency of several thousand dollars that you're liable for!
What is the "GAP" on your vehicle? You may be surprised at the answer!
GAP offers an additional measure of family security and peace-of-mind by reducing the financial burden that may be incurred if your vehicle is stolen or totaled. Additionally, GAP prevents the deficiency loan balance from being added to a new loan in the event of a total loss, and serves to protect your credit rating. GAP can be purchased at a low, one-time cost.
Easy to Purchase
GAP can be included in the amount financed with the loan. Coverage takes effect immediately upon loan dispersal.
Covers Primary Insurance Deductible
GAP covers the owner's primary insurance deductible up to $1,000.00. This results in another reduced financial burden associated with a vehicle being stolen or totaled, and is one more way in which GAP provides peace-of-mind.
How GAP Works - A Typical Example
- Vehicle's original purchase price: $25,000.00
- Suppose after one year you experience a total loss on your vehicle... Loan balance after one year: $20,000.00
- Insurance settlement covering vehicle's current value: $16,000.00
- Your lost investment without GAP... Your remaining unpaid loan balance; the "GAP" (including your deductible, up to $1,000)** : $4,000.00
- GAP pays the following toward the financing or leasing of a replacement vehicle... GAP pays the difference: $4,000.00
Total GAP Benefit: $4,000.00
GAP Example Graph:
** Deductible reimbursement is available in most, but not all states. Please consult your financing representative for the availability of this benefit.