June 25, 2020What Is Gap and Why Do You Need It?
What is GAP?
You found the perfect car – sunroof, leather seats, navigation system – the works. You couldn’t be happier. Then…you sit down with the finance person at the dealership. Loan terms get tossed around and before you know it, you’re completely lost and unsure what you’re agreeing to.
That’s Why We’re Here
Our goal is to help make your car-buying experience as fun and exciting as possible. And one way we can help is by explaining upfront, the car-buying process. But right now, let’s focus on a common protection plan called GAP.
What is GAP?
GAP or Guaranteed Asset Protection is an important and beneficial tool. It’s an extra layer of protection in addition to your normal auto insurance.
If your vehicle is totaled beyond repair, your insurance company will pay you the current value of your lost vehicle. But a vehicle’s value can quickly depreciate.
What if you owed more than the current value of your vehicle if it’s totaled?
The following example will help illustrate the benefits of GAP.
|Original purchase price of vehicle:||$25,000|
|Loan balance at the time of your claim:||$21,000|
|Insurance company’s estimate vehicle value:||$16,000|
|Money owed after insurance payout:||$5,000|
|Total GAP Benefit:||$5,000|
If you have GAP (Guaranteed Asset Protection), the $5,000 in this example would be covered.
How to Get GAP?
Almost all dealerships offer GAP. In fact, it’s usually one of the first things the dealership will ask you about. However, at PEFCU we offer GAP as well, and it’s usually up to 50% LESS than dealership prices.
When you apply for your new or pre-owned vehicle with us, our Loan Officers will review GAP and other options available – all designed to save you money and eliminate confusion before you ever visit a dealership. As a not-for-profit financial institution, our purpose is to help you make better financial decisions, not generate extra income like dealerships.
We’re Ready to Help!
If you have any questions about GAP or would like to speak with a Loan Officer about being pre-approved for an auto loan, apply online, stop by any branch location, or give us a call at 1-800-226-6673.
Each individual’s financial situation is unique, and readers are encouraged to contact PEFCU when seeking financial advice on the products and services discussed. This article is for educational purposes only; It does not constitute legal advice. If such advice or a legal opinion is required, please consult with competent local counsel.