Insurance has its Limits.
Most insurance policies only cover the actual cash value of your vehicle. This
value declines rapidly during the first few years of ownership, beginning as soon
as you leave the dealership. As a result, there can be a substantial shortfall or
"gap" between your loan or lease balance and the amount your insurance pays to
replace your vehicle. You can end up owing money on a vehicle you no longer
Gap Closes the Distance.
GAP protection is a non-insurance product that covers the "gap" by paying the
difference between your primary carrier's insurance settlement and your loan or
lease balance. The GAP payment covers the insurance deductible up to $1,000
but does not pay for delinquent payments, late charges, refundable service
warranty contracts, and other insurance-related charges.
Who Needs It?
- Anyone that finances a vehicle.
- Anyone that leases a vehicle.
How does it work?
Say you bought a car for $30,000 and financed the total amount. In a few months
that car might have an actual cash value of only $24,000. Meanwhile, your monthly
payments haven't even made a dent in the loan. If the car was a total loss, your
insurance company would only pay you $24,000 and you would still owe the
lender the $30,000 you financed -- even more if you built tax and license fees into
the amount financed.
Deductible reimbursement benefits are available in most states. Please consult your
financing representative for the availability of this benefit.
|Copyright 2008 Financial Security Solutions Inc.
|Loan Balance at Time of Loss
|Value of the Vehicle
|Less Insurance Deductible
||- $ 1,000
|Auto Insurance Settlement
|GAP Amount (What You Could Owe)
|With GAP Insurance You Would Owe
Financial Security Solutions, Inc.