GAP Coverage: Extra Protection for the Unexpected
If your vehicle is ever totaled, or stolen and not recovered, your auto insurance may not cover the full amount you still owe on your loan, leaving you with a balance still due. By having GAP (Guaranteed Asset Protection)*, your insurance deductible is covered and that remaining balance will be paid off, making it easier for you to purchase a new vehicle.
GAP coverage helps to cover the “gap” between what you owe on the remainder of the auto loan and what your insurance company pays if your vehicle is a total loss.
In most cases of a total loss, insurance companies only pay the current market value of the vehicle, not the remaining loan balance. For example, if your vehicle is valued at $5,000 at the time of the loss, but you still owe $10,000 on your loan, GAP coverage would cover the additional $5,000 needed to pay off the loan, so you aren’t paying out of pocket for a loan for a vehicle that no longer exists.
With GAP coverage through TFed, you may receive up to $1,000 towards your next auto loan financed through us, so you can get back up on your feet and on the road seamlessly.
Who should consider GAP Coverage?
GAP coverage would make sense for a borrower who:
- Has a long loan term
- Has a high loan-to-value (LTV) ratio
- Will be driving the vehicle frequently and/or for long distances
GAP coverage can be paid for up-front or rolled into your loan payments each month.
*GAP (Guaranteed Asset Protection) is a voluntary, non-insurance product that cancels a portion of your loan balance in the event of a total loss, subject to terms and conditions. GAP coverage is not required to obtain financing. Coverage may include deductible assistance up to applicable limits. Benefits, including the auto loan credit, are subject to eligibility requirements and program terms. Pricing may vary and is subject to change. GAP coverage may be canceled at any time; refunds may be available depending on timing and terms. Certain exclusions and limitations apply. Please refer to your GAP Addendum for complete details.
