Guaranteed Auto Protection (GAP)
YOUR AUTO INSURANCE DOES NOT COVER EVERYTHING!
In the event your vehicle is deemed a total loss due to an accident or theft, your auto insurance policy will usually cover only the actual cash value or market value of your vehicle less a deductible. This settlement could be significantly less than the amount you owe to your lender or leasing company. The final result is a financial GAP where you must make up the difference, which could mean thousands of dollars out of your pocket.
Guaranteed Auto Protection is a loan/lease deficiency waiver and is not offered as insurance coverage.
The purchase of Guaranteed Auto Protection is voluntary and cannot be required as a condition of credit approval.
Protection through Guaranteed Auto Protection
Guaranteed Auto Protection protects individuals who finance a new or used vehicle from the financial GAP. In the current market, during the first few years that you own your vehicle, your loan/lease balance can be higher than the actual value of your vehicle, as a result of depreciation. As your vehicle’s value declines, your loan/lease balance may decline more slowly, resulting in a financial gap. If your vehicle were stolen or totaled in an accident, you would be liable to pay the difference between your insurance settlement and your outstanding loan/lease balance.
Guaranteed Auto Protection covers the difference between the actual cash value of your vehicle and the loan/lease balance, less delinquent payments, late charges, refundable service warranty contracts and other insurance-related charges.
Guaranteed Auto Protection will even cover your auto insurance deductible of $500 or $1,000. The actual amount depends on your credit union’s program limits. Ask your lender/loan officer for details.