In the event your vehicle is deemed a total loss due to an accident or theft, your auto insurance policy will usually only cover the actual cash value or market value of your vehicle less a deductible. This settlement could be significantly less than the amount you owe to your lender or leasing company. The final result is a financial GAP where you must make up the difference. That could mean thousands of dollars out of your pocket.
Guaranteed Auto Protection protects individuals who finance a new or used vehicle from the financial GAP.
In the current market, during the first few years that you own your vehicle, your loan/lease balance can be higher than the actual value of your vehicle as a result of depreciation. As your vehicle's value declines, your loan/lease balance may decline more slowly resulting in a financial gap. If your vehicle were stolen or totaled in an accident, you would be liable to pay the difference between your insurance settlement and your outstanding loan/lease balance.
Guaranteed Auto Protection covers the difference between the actual cash value of your vehicle and the loan/lease balance, less delinquent payments, late charges, refundable service warranty contracts and other insurance related charges.
If you are thinking about purchasing a new vehicle, you can ask a loan representative about adding GAP Insurance Coverage at closing. For more information or questions regarding GAP Insurance, you can also contact our Loan Department at (800) 292-2905 or (502) 368-5858. Or, contact us by filling out our Contact Form.