What is GAP Insurance?
GAP Insurance (Guaranteed Asset Protection) is an optional type of vehicle insurance coverage. It protects in the event your vehicle is written off from incidents such as: collision, theft, fire, or vandalism. Also referred to as GAP protection, it covers the gap between what your vehicle is worth and how much is still owed to the bank.
Essentially GAP insurance pays off your auto loan if you owe more money on your loan than what your vehicle is worth in case of insurance write-off.
Why Is GAP Insurance Essential?
There are many situations when GAP protection is important.
- Depreciation – depreciation can cause your vehicle’s value to be less than what you owe on your vehicle
- Long Auto Loans – longer-term results in lower payments but increases the need for GAP protection as the vehicle is depreciating at a faster rate than your payment
- Negative Equity – carrying negative equity from previously traded-in vehicle
- Add-Ons – anything added to the loan such as warranties, insurance, winter tires, or any accessories that are generally not covered under regular insurance
- $0 Down – zero down payment loans increase the chances of having outstanding balances in case of an insurance write-off
- Excessive Driving – using your vehicle for work or delivery services such as Uber or Skip the Dishes results in having higher KM’s on your vehicle, thus lowering your insurance settlement
What Is The Purpose Of GAP Insurance?
GAP insurance provides you with financial protection against loss if your vehicle is written off. It is quite common for the insurance company’s settlement to be insufficient to close off the loan. This can create a gap. GAP protection ensures you don’t pay for this gap out of pocket.
What Happens If You Don’t Have Gap And The Vehicle Is Written Off?
In such circumstances, you are responsible for the original loan balance, and payments will still be required even though your vehicle is no longer on the road. This can put your credit under stress and risk of default payments. Many financial institutions limit applicants to financing one vehicle at a time. As a consequence, you might not be able to purchase a replacement vehicle until the gap difference between your original loan and insurance settlement is paid off, out of your pocket.
What We Offer:
By purchasing GAP insurance from Titanium Auto, you will receive the following benefits:
- GAP protection up to $50,000
- GAP protection that includes negative equity, tax, and all add-on’s such as winter tires and warranties
- $1,000 coverage towards paying your insurance deductible
- $250 coverage towards getting a rental car
- $500 loyalty rebate towards your next vehicle
How Much Is GAP Insurance?
As always, we pride ourselves in having the best prices on our products and services. Our GAP insurance price is a one-time fee that gets divided in your payments. Our policies provide protection for the whole term of your financing. With an average price of $1,000, it’s a relatively low price that will protect you and your credit from paying out of pocket.
Please Note: Gap insurance is only available from car dealerships or financing companies; it is not available from regular insurance companies.
Please Note: This information is provided for illustration purposes only and does not replace or add to the GAP contract. It is an outline and the content may change without notice. All benefits described are subject to the terms and conditions of the GAP provider.