Like it or not, new cars depreciate the moment you drive off of the car lot leaving a “gap” between what you owe and the car’s value. Guaranteed Auto Protection or GAP protects you from that depreciation.

If your vehicle is stolen or damaged beyond repair, GAP pays the difference between the actual cash value from an insurance payout and the eligible remaining balance of the loan.

FOR EXAMPLE:

You finance $30,000 for a new car.

You’ve had it for a few years and have been making all your payments.

The vehicle is now worth $20,000 but you owe $25,000 on your loan, representing a $5,000 gap.

Unfortunately, you have an accident, and your vehicle is deemed totaled by insurance.

With GAP coverage, insurance would pay $20,000 (minus your deductible) and your GAP protection would pay the $5,000 remaining loan balance.

 Without GAP protection, you’d only receive $20,000 from insurance (minus your deductible).

GAP is not required but it does provide a valuable safeguard against depreciation. Consider buying GAP coverage when:

• You made a lower down payment on a new car: If your down payment is less than 20%, you could end up with negative equity on the vehicle as soon as you drive away from the dealership.
• You have a longer financing term for your vehicle: The longer your vehicle is financed, the better the chance of owing more on the vehicle than it’s worth.
• You want to protect yourself against depreciation: Some cars have a higher depreciation rate than others, so knowing the average depreciation for your vehicle could help determine if you need gap coverage.

Members Trust offers affordable GAP coverage for a one-time fee of $335. Plus, we can finance it with your car loan! Find out more here or give us a call today.