GAP Insurance

Guaranteed Asset Protection (GAP) coverage pays the difference between the scheduled principal balance on your auto loan and the actual cash value (ACV) of your vehicle.

What Is GAP Insurance?

… A Must Have In Today’s World

What Does GAP Cover?

GAP pays the difference between the outstanding scheduled principal balance and the vehicle’s actual cash value, determined by your primary auto insurance carrier, on your auto loan or lease in the event of total loss or theft. GAP covers up to $1,000 of the borrower’s deductible if there is a ”GAP“ after the primary insurance settlement is paid.


Insurance Settlement

Actual Cash Value        16,000    20,000

Insurance Deductible    -1,000   -15,000

Loan Settlement Outstanding Loan BalanceInsurance Settlement
Insurance Settlement   15,000       5,000 GAP

GAP Statistics

  • According to Automotive News, the average new car will lose 60% of its value over 3 years of normal driving.
  • The Insurance Information Institute estimates that one vehicle is stolen in the United States every 24 seconds.
  • CCC Information Services, a firm that supplies the automotive claims and collision repair industries with collision statistics, tells us that 18% of vehicles involved in a collision will result in a total loss.
  • Insurance companies report that on an annual basis, they write off 500,000 insured vehicles due to total loss, fire or theft.

GAP Value Graph


However, you may be surprised to learn that in the event of a total loss, the settlement amount received from your insurance company is the actual cash or market value of your vehicle. In many cases, this amount is less than what you owe the lender or lease company, and you are responsible for the difference.

To learn more, please contact your credit union representative.