A guaranteed asset protection (GAP) waiver, sometimes referred to as debt cancellation agreement, is designed to relieve some or all the difference between what is owed on the finance agreement and what auto insurance paid to the borrower.
GAP waivers are a valuable investment, offering both peace of mind and protection for your vehicle. Like all products, GAP Waivers vary from provider to provider. The following Frequently Asked Questions provide answers to the questions many consumers have. If you have additional questions regarding your policy, please contact your GAP Waiver provider.
Why and where to Purchase GAP?
GAP coverage makes sense for many consumers who lease or finance the purchase of their car. For many drivers, a standard auto insurance policy provides only enough protection to cover the actual cash value of a vehicle that is damaged or stolen. If the car’s actual cash value is lower than the amount owed on the loan or lease, that difference, or “gap,” is often not covered by insurance. The borrower is still responsible for paying the amount remaining on the finance agreement. If the borrower had purchased a GAP waiver, the lender would waive payment of some or all of that remaining balance pursuant to the terms of the contract.
A GAP waiver can be purchased at the dealership or your financing institution at the time you purchase or lease the vehicle.