Protect Yourself with GAP Insurance on your Vehicle(s)
GAP Insurance is a great way to protect you and save you money! But what is GAP? GAP stands for Guaranteed Auto Protection. If your automobile gets stolen or gets damaged and deemed a total loss, you are responsible to pay the difference between what you owe and what your insurance company says your vehicle is worth. GAP Insurance will cover the difference and potentially save you thousands of dollars. Here is an example:
- Loan Payoff: $20,000
- Vehicle Value Determined By Insurance – $16,000
- Primary Insurance Deductible +$500
- Your Responsibility Without GAP: $4,500
In this example, if you did not have GAP Insurance, you would still have to pay the remaining $4,500 on your loan. If you did have GAP Insurance, you would owe nothing! GAP Insurance would cover the amount that is still owed on your loan.
Please be aware, dealers can charge anywhere from $500 to $900 for GAP Insurance. The cost through PFCU is only $450.
If you are financing through the dealer, make sure to ask how much GAP costs. We have heard that some dealers automatically add GAP to the sales price. Unless the Finance Manager at the dealer is going over the loan line by line, you may not know that another $700 has been added to the cost of your loan.
It’s important to look at everything when you finance a car. If the dealer and PFCU are offering the same finance rate, you may be saving yourself $400 (plus interest) by financing at PFCU because of the cost of the GAP Insurance.
Vehicles that are eligible for GAP Insurance are new and used autos, vans, SUVs, and light trucks, up to 1 ton loan capacity. Other vehicles may be eligible, so please call a Loan Officer 847.697.3281.
If you’re not sure about purchasing GAP Insurance when closing your loan at PFCU, that’s no problem. You can purchase GAP anytime after loan origination but it is not recommended after 18 months. GAP Insurance is also available when you refinance a car loan.
PFCU requires GAP Insurance on all vehicle loans with a term of 84 months, however, GAP is available on any loan with any term as long as a value for the vehicle can be found in the regular NADA publication. The maximum GAP loss covered is $ 50,000.00.
