Understanding GAP Coverage

You’ve got a new vehicle in mind, and you’re excited to sign on the dotted line and drive it off the lot. One thing to keep in mind before you do, though, is whether you’ll be protected should you suffer a theft or total vehicle loss. As Investopedia.com explains, while your auto insurance may cover the cash value of your vehicle prior to the damage or loss, it does not necessarily cover the total outstanding balance of your lease or finance contract, leaving you with a “gap” in your coverage that can potentially translate into a hefty bill.

What is GAP Coverage?

Guaranteed Asset Protection, or GAP coverage, protects a buyer or lessee in the case of total loss. Simply put, it helps bridge the gap between how much is owed for the vehicle and how much the car is worth if it is totaled or stolen. GAP coverage is included with all Ally leases, but not all finance companies include GAP. If you’re purchasing a vehicle, you can typically include GAP coverage at the time you sign the lease or finance contract  papers.

Do I Need a GAP Contract?

Accidents happen, and it’s important to consider that if you have a total loss of your vehicle, your primary insurer’s settlement payment amount may not cover the amount you owe.  If you are concerned about possibly not having enough money on your own to pay that “gap” amount to the lender, you should consider the purchase of GAP.

Where Do I Get GAP Coverage?

When it comes to purchasing your GAP Coverage, you have several different options.. According to DMV.org, GAP coverage is available from a variety of providers.  GAP is typically offered by a dealership during the vehicle purchase process.  You also may be able to get GAP through your auto insurance company, the lender that’s financing your vehicle, or an independent GAP provider.

Still not sure if GAP coverage is right for you? Learn more about Ally’s GAP coverage here. Also, your local dealer is always available to answer any questions you may have. And don’t forget to head on over to Ally Wallet Wise for tips on this and other great auto topics.

Other Posts You Might Like:
Credit Scores: What Goes Into Them and What Affects Them [INFOGRAPHIC] To Lease or Buy: Which is Right for You?
Square Away Your Lease-End Questions

 

 

 

External Link Image Label Links to non-Ally websites

We provide links to third-party websites for your convenience. Although we provide a link, Ally Financial is not responsible, nor can we guarantee their products, services, or information. We suggest you review their online policy and security practices to learn about this third party and how they handle consumer information.

1 comment

  1. 1
    Felecia Dary

    I differ with many guys here; I identified this blog post I couldn’t stop until I had been done, though it wasn’t just what I had been searching for, was still the great read though. We will immediately get your current blog feed to maintain in touch of upcoming updates.

Leave a Comment