What is GAP Coverage?
Guaranteed Asset Protection (GAP) covers the difference between a vehicle’s insurance payout and the remaining loan balance in case of a total loss. It helps customers avoid financial hardship while increasing dealership F&I revenue.
Coverage includes:
- Totaled Vehicles: Pays the remaining balance if the vehicle is a total loss.
- Theft Protection: Covers the gap if insurance doesn’t pay off the loan.
- Negative Equity Protection: Helps customers avoid out-of-pocket expenses.
- Loan & Lease Eligibility: Available for financed and leased vehicles.
Key Benefits for Dealers & Customers:
GAP coverage has a number of benefits, including:
- Protects Customers from Loan Deficits: Prevents customers from owing money on a totaled car.
- Increases F&I Profits: A high-value, easy-to-sell add-on.
- Works with Insurance Payouts: Covers what standard insurance won’t.
- Essential for Long Loan Terms: Great for customers with low down payments.
Frequently Asked Questions
Q: Is GAP insurance required?
A: No, but it’s highly recommended for financed or leased vehicles.
Q: How is the payout determined?
A: The policy covers the difference between the car’s actual cash value and the remaining loan balance.
