According to CarFax, “the value of a new vehicle can drop by more than 20 percent after the first 12 months of ownership”? 1 So you may owe more than what your car is actually worth. GAP insurance can cover the difference between what your car was initially worth and what it has depreciated to in the event that your car is declared a total loss. Your vehicle can be declared a total loss depending on whether it was totaled in an accident or it was stolen and unrecovered.
What is GAP insurance?
GAP insurance stands for Guaranteed Asset Protection and is an optional add-on coverage plan. If you are making payments on your vehicle at the time where it becomes a total loss, GAP insurance can cover the difference.
Benefits Of GAP Insurance
If your vehicle is declared a total loss and you do not have GAP insurance, you would owe the remaining unpaid loan balance. With GAP insurance, you can have peace-of-mind that you won’t have to continue paying for a vehicle that you cannot drive and can get into a new vehicle right away.
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| Loan Balance at Time of Loss | $18,000 |
| Insurance Settlement Covering Vehicle’s Value at Time of Loss | $12,000 |
| Remaining Unpaid Loan Balance | $6,000 |
| GAP Waiver Benefit | $6,000 |
Your Net Cost* |
$0 |
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Should I get GAP insurance?
GAP insurance is a great add-on to consider that can save you time and money. To learn more about GAP insurance and if it’s the right choice for you, contact out Finance Manager today at: 219-865-4400.
Disclaimer: State restrictions may apply. May not pay off the entire deficiency in all circumstances. Please see your contract for specific details of the term and conditions of coverage. Rates may vary. Must qualify for Guaranteed Asset Protection insurance.
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