Guaranteed Auto Protection Insurance, otherwise known as GAP insurance is designed to protect you and your vehicle if it is ever damaged beyond repair in an accident and declared a total loss or stolen and never recovered.  Typically your primary auto insurance won’t likely cover the entire amount you owe on a lease or loan.  In fact, it usually only covers the actual cash or market value of the vehicle. 

If this happens, you may have to pay from your own pocket the difference between the vehicle’s actual cash value and the amount you owe on your loan or lease.  GAP insurance will help you pay off the loan or lease balance on your new or pre-owned vehicle.

So, if you take out a loan or lease, you may want to consider GAP.  If you purchase a vehicle with cash, GAP Insurance is not needed.

I have personally had to use GAP Insurance!  About 3 years ago I financed a Chevy Tahoe. I owned it for a couple of years until I let my teenage son drive it. It had been a week of dry weather and then the rain came -you know how slick the streets are after the first rain.  He was taking his friend home and turned the corner going onto the main road, he must have maybe punched it too hard because he lost control of it and ran head on into an oncoming moving truck. the accident totaled my Tahoe and the other truck as well. Fortunately everyone was okay but my SUV was wreaked.  (Gotta love camera phones, that is me on the left freaking out.)

My auto insurance company did their thing and paid off the majority of my loan. However, there was a balance that they were unwilling to cover.  Thank goodness I had GAP insurance, which took care of the rest of my loan. Since no one likes to pay on a vehicle they don’t own anymore, I would highly recommend GAP to everyone who is financing their vehicle!

If you have any questions on GAP insurance or financing let me know!