What Is Guaranteed Asset Protection (GAP) & Who Needs It?
What Is Guaranteed Asset Protection (GAP)?
Guaranteed Asset Protection, otherwise known as GAP, is an optional insurance coverage offered as a supplement to an auto, motorcycle, boat, ATV, or RV loan. This product is offered to help protect a loan from negative equity. Negative equity is when you owe more than your vehicle is worth, which is a situation many of us find ourselves in after buying!
How Would GAP Coverage Help You?
GAP’s main purpose is to protect the investment you made in your vehicle in worst-case scenarios. In the event that your vehicle is deemed a total loss by insurance or if your vehicle is stolen, GAP covers the difference between what you owe on your loan and what your insurance will pay.
HOW CAN HONOR HELP? Check out our competitive low auto loan rates & various loan protection options
Also, if you have to pay any car insurance deductibles, GAP may reimburse you for the first three years of your policy through the Auto Deductible Reimbursement!
Be sure to talk to an Honor Member Specialist about how you could potentially get reimbursed for PAID vehicle insurance deductibles up to $500 per loss with unlimited losses per year.
GAP Coverage Example
Here’s a hypothetical situation if you were to total your vehicle:
Your Loan Balance: $15,000
Your Insurance Company Settlement: $10,000
Remaining Balance: $5,000
Total You Owe Without GAP: $5,000
Total You Owe With GAP: $0
Not Sure If GAP Is Right For You?
If you’re not sure if Guaranteed Asset Protection is right for you, here are three questions to ask yourself when deciding.
Do you owe more on the loan than what the vehicle is worth?
If you owe more on the loan than what the vehicle is worth, we recommend getting GAP coverage.
Do you have enough money in your savings to pay the difference between what you owe and what the vehicle is worth?
If you don’t have enough to pay the difference, or if you don’t want to pay the difference out of pocket, then we recommend you get GAP coverage.
How would you like a $1,000 credit towards the purchase of your next vehicle if you get into an accident and total your current one?
One big perk of GAP is you receive a $1,000 credit towards the purchase of your next that is financed through Honor if you total your current vehicle.
We understand Guaranteed Asset Protection might be like a foreign language to you. If you have questions, would like more information about GAP information, or to get a quote, stop by a local member center, or give us a call at 800.442.2800 and our team would be happy to help you.
More To Explore
Refinancing an auto loan can come with benefits, such as lower interest rates, lower monthly payments, or a boost to
By Macy O’Dell | Honor CU So, it’s your first time buying a car, and probably your first time ever