Why do you need Guaranteed Asset Protection (GAP)?
If your vehicle is stolen or totaled in an accident, most insurance companies will only pay its cash value. If you’re still making payments on your vehicle and the current balance of your loan is above your vehicle’s cash value, you’re liable for the difference. That can amount to thousands of dollars.
GAP protection can waive all or part of your remaining loan balance. In some states, GAP can even cover a portion of your deductible as well! This is subject to some limitations and exclusions, including a maximum loan to value ratio. Your loan to value ratio is the original amount you financed for your loan compared to the value of your vehicle at the time of your loan. GAP will only waive the part of your remaining loan balance below the maximum loan to value ratio.