You have had an accident that destroyed your car and, now, could be disappointed with your total loss payoff check from your insurance provider. It is not as uncommon as you might think. Lots of people are "underwater" on their car loans—meaning you owe more than your car is worth at the time of the loss. This situation can put you at risk of receiving a payoff check that is lower than your auto loan balance.
Guaranteed Auto Protection (GAP) coverage makes up the difference between the settlement amount from your insurance company and the amount still owed to a finance company. Whether you are leasing or financing, GAP helps protect you from paying out-of-pocket for expenses you may face with a total vehicle loss.
Consider purchasing GAP Coverage if:
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Low Down Payment: If you put less than 20% down, you are at higher risk of owing more than the vehicle's Actual Cash Value.
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Long Finance Term: Loans longer than four years are ideal candidates for GAP.
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Prior Loan Balance: If you rolled negative equity from a previous vehicle into your new loan, GAP provides essential value.