GAP Insurance and You

The next step after agreeing to purchase a vehicle can sometimes be an intimidating one. This is the time when you meet with the dealership's Business Manager or Finance and Insurance (F&I) Manager to go over the specifics of your financing and also review some additional products that may be available to you to help protect your investment.

One of these optional products is GAP Insurance. GAP Insurance is actually one of the most inexpensive products the dealership can offer but it can also be the one that can save you the most money and prevent a lot of headaches.

In a nutshell, in the event that the vehicle you purchase is in an accident and totaled, GAP Insurance will pay the difference between the amount owed to your Bank or Credit Union and what your Insurance Company decides our vehicle is worth.

For example – A year after you purchase your new Chevy Impala you are in an accident and the vehicle is considered a total loss. You may owe $21,000, including interest, to your Credit Union and your Insurance Company decides it is worth $16,500 based on current market value. That would leave you owing $4,500 to your Credit Union before they would consider the loan paid off. If you had decided to purchase GAP Insurance with your loan that difference would be paid off.

Like many types of insurance, the monthly cost of the protection is minimal but the benefits and savings to you can be huge!