What’s GAP?
You just bought a new car and plan to keep it for years. Bam, two years in, your car is totaled and you’re out that set of wheels. You contact your insurance company and find out they aren’t going to pay you the entire loan balance, only the car’s cash value. Now what do you do?
That’s right…if your vehicle were to be totaled or stolen, your insurance company might not pay off the entire loan balance. Most insurance companies only pay the cash value of the vehicle at the time of the loss, and outstanding loan balances are frequently higher than the car’s actual value, which creates a difference you’re responsible for. This is where GAP (or Guaranteed Asset Protection) coverage comes into the picture.
What is the benefit of having GAP coverage?
In the case above, if the value of your car is less than the balance of your auto loan, you’re “upside down,” and which creates a gap not covered by standard insurance. In this scenario, GAP protection will help you cover the void that’s left when insurance doesn’t pay your car’s remaining loan balance. GAP protection is offered on every car loan. The price is determined by the amount financed and the loan, and oftentimes, the cost of GAP can be included in your monthly payment.
KEMBA’s GAP protection offers a unique benefit, GAP PLUS. GAP PLUS features an additional $1000 of coverage when applied when you finance a replacement vehicle at KEMBA within 90 days of the GAP claim settlement.
You may want to consider GAP if:
- You made a low down payment
- Your loan term is longer than 60 months
- You drive more than the average driver (over 15,000 miles a year)
- Your car make and model depreciates quickly
GAP does not cover: Rental car costs, auto repairs, or missed payments
