What is GAP (Guaranteed Asset Protection) insurance and do I need it?
What is GAP insurance and does Topside FCU offer it?
Here at Topside FCU, we offer GAP coverage on a variety of our loans. Guaranteed asset protection (GAP) coverage is here to protect you, the borrower, and your finances! If you buy a brand new car or motorcycle and it gets totaled, this coverage will pay the remaining difference between the actual cash value of the insured vehicle, and the balance that's still owed.
For example, let's say you spent $22,000 on your new ride, and the cash value of it is only $15,000. Typically your insurance will only cover the cash value, so getting GAP insurance covers the remaining $7,000. If you didn't have GAP in this situation, you would still owe $7,000 on a vehicle that is no longer functional.
Should you get GAP insurance?
In the case of an accident you may find yourself owing more than what your vehicle is worth. We suggest that you consider Guaranteed Asset Protection (GAP) insurance if one or more of the following apply to you:
- Your remaining balance is more than your vehicle is worth.
- You financed your vehicle with less than a 15% down payment (or equivalent savings).
- Your lease contract (if applicable) may require GAP insurance.
- Your financing period is longer than 60 months.
- You expect accelerated depreciation resulting from wear and tear.
Not only do we offer GAP insurance, we also offer a GAP advantage waiver. This is where if you happen to total your vehicle that has GAP insurance on it, you will get $1,000 put toward the balance of your replacement vehicle as long as you finance it with us within 90 days of the loss!
Check out this video for more information about GAP: