Guaranteed Asset Protection

Nobody wants to be paying off an auto loan for a vehicle that has been totaled or stolen. Guaranteed Asset Protection, more commonly referred to as GAP, is a non-insurance policy that covers the difference between the value of a car and what the borrower owes on the loan if the car is totaled or stolen – it waives the remaining loan balance that is not covered by the borrower’s primary insurance.

To further explain how GAP works, it basically covers the difference between your outstanding loan amount and the actual cash value of the car. The value of your car depreciates as soon as you drive it off the car lot, so when an accident occurs, your insurance company will cover the value that your vehicle is currently worth – this results in a gap between the vehicle’s loan balance and the current vehicle value. Without having GAP, you will have to pay the remaining balance off out of pocket, plus the financing of your replacement vehicle that you will most likely need to purchase. By having Guaranteed Asset Protection, it waives all or almost all of that remaining balance. This should help you be able to afford a replacement vehicle; it doesn’t hurt your credit rating, and ensures you are suffering much less financially. Guaranteed Asset Protection is the best way to avoid financial loss in the event of a stolen or totaled car!

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