There are many insurance options when you are purchasing a vehicle, but something less often talked about is GAP Insurance (also known as Guaranteed Asset Protection).
What is GAP Insurance?
GAP is an optional insurance to help protect your vehicle loan which is not necessarily covered by your auto insurance. If your vehicle is wrecked and declared a total loss, GAP insurance will cover the difference between what your vehicle is currently worth and any excess amount owed on your loan.
How does it work?
The minute you leave the car lot with your vehicle purchase, the value of the vehicle begins depreciating. Typically, vehicles lose about twenty percent of their value within the first year. Auto insurance will cover the current market value of the car if it is totaled, not what you currently owe on your auto loan. GAP insurance does exactly what it says – it fills the gap between the insurance payout and the loan balance. This protects you financially so you are not left owing money for a loan on a car you can’t drive.
Is GAP right for you?
GAP insurance isn’t for everyone. If the amount you are borrowing is less than eighty percent of your vehicle’s value, GAP probably doesn’t make sense. But, if you’re financing one hundred percent or more of the purchase, it’s definitely worth considering.
At SRU Federal Credit Union, we are always working to ensure we have the best products for our members. GAP insurance is a great option to think about for the purchase of your next vehicle. If you have questions or would like to learn more, please contact our loan department at 724-794-6292.
Your purchase of MEMBERS CHOICE TM Guaranteed Asset Protection (GAP), which includes deductible assistance, is optional and will not affect your loan application for credit or the terms of any credit agreement you have with us. Certain eligibility requirements, conditions, and exclusions may apply. You will receive the contract before you are required to pay for GAP. You should carefully read the contract for a full explanation of the terms. If you choose GAP, adding the GAP fee to your loan amount will increase the cost of GAP. You may cancel GAP at any time. If you cancel GAP within 90 days you will receive a full refund of any fee paid.
GAP purchase from state chartered credit unions in FL, GA, IA, RI, UT, VT, and WI, may be with or without a refund provision. Prices of the refundable and non-refundable products are likely to differ. If you choose a refundable product, you may cancel at any time during the loan and receive a refund of the unearned fee.
GAP purchase from state chartered credit unions in CO, MO, or SC may be canceled at any time during the loan and receive a refund of the unearned fee.
GAP purchase from state chartered credit unions in IN may be without a refund provision. If the credit union offers a refund provision, you may cancel at any time during the loan and receive a refund of the unearned fee. Unique ID & Copyright GAP-3415626.1-0121-0423 CUNA Mutual Group ©2021, All Rights Reserved.