GAP Protection

If you're financing a vehicle, lenders require you to have collision and comprehensive coverage on your auto insurance policy until your vehicle is paid off.

GAP Protection is meant to be used in conjunction with collision or comprehensive coverage. If you have a covered claim, this coverage would help pay for your totaled or stolen vehicle up to its depreciated value. Most vehicles depreciate about 20 percent in value the first year of ownership. But what if you owe more on your loan or lease than the vehicle’s depreciated value? That’s where GAP Protection may help.

Benefits of GAP Protection

Covers The Difference

GAP Protection covers the difference between what your primary auto insurance will pay and the balance due on your loan contract if you suffer a covered total loss.

Covers Insurance Deductible

Where permitted by law, GAP Protection covers your insurance deductible up to $1,000.

Eases Financial Burden

GAP Protection eases the financial burden that comes with a total loss of your vehicle.

How Does GAP Protection Work?

Here’s an example of how GAP Protection may work for you: Say you bought a vehicle for $25,000. You still owe $20,000 on your auto loan when the vehicle is totaled in a covered collision. Your collision coverage would pay your lender up to the totaled vehicle’s depreciated value, say $19,000. If you don’t have GAP Protection, you would have to pay $1,000 out of your own pocket to settle your auto loan on the totaled vehicle. If you have GAP Protection, your GAP insurer would help pay the $1,000.

Keep in mind that, in the above scenario, the car insurance reimbursement goes completely to your auto lender to pay off a car that's no longer drivable.

Vehicle Value (ACV)$20,000
Less Primary Auto Insurance Deductible*-$1,000
Primary Auto Insurance Payment$19,000
 
Loan or Lease Contract Payoff$23,000
Primary Auto Insurance Payment*$23,000
GAP Payment$4,000
 
Your Out of Pocket Expense$0

*GAP will pay up to $1,000 of your primary auto insurance deductible, subject to the terms and conditions of the agreement and where permitted by law.

**Less any items excluded in the agreement.


Why do I need GAP Protection?

If you’re financing a vehicle, lenders require you to have collision and comprehensive coverage on your auto insurance policy until your vehicle is paid off.

GAP Protection is meant to be used in conjunction with collision or comprehensive coverage. If you have a covered claim, this coverage would help pay for your totaled or stolen vehicle up to its depreciated value. Most vehicles’ value depreciates about 20 percent in the first year of ownership. But what if you owe more on your loan or lease than the vehicle’s depreciated value? That’s where GAP Protection may help


Can you get GAP Protection after you buy a car?

You can purchase GAP Protection from us within 72 hours of purchasing your vehicle on our platform. We do not offer GAP Protection for vehicles purchased off our platform.


Is buying GAP Protection worth it?

If you’re considering buying GAP Protection, it is important to remember that this type of coverage is only available if you’re financing your vehicle. Consider the amount owed on your loan versus the value of your vehicle. Do you owe more than your vehicle’s book value? Could you afford to pay the difference out of pocket if your vehicle is totaled?

According to the GAP Protection experts, you may want to consider GAP Protection in the following situations:

  • If you made less than a 20 percent down payment on your vehicle
  • If your auto loan is 60 months or longer
  • If you would like help paying off your loan and paying your insurance deductible should your vehicle be totaled or stolen

In what situations does GAP Protection apply?

GAP Protection coverage may apply if you owe more on your auto loan than what the vehicle is worth when your vehicle is stolen or totaled. For your vehicle to be deemed totaled, the repair costs must exceed the value of the vehicle. Whether a vehicle is declared totaled depends on state laws and your insurer’s discretion.