Guaranteed Auto Protection (GAP) Waiver ... - Lobel Financial 2025

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If your vehicle is damaged in an accident and cant be repaired or is stolen, a gap waiver waives the balance left on your vehicle loan up to a certain amount. The maximum amount waived varies, depending on your lender or lease company.
GAP Insurance essentially does the same thing that a GAP Waiver when it comes to financial protection, but instead of being a part of your auto loan contract through your lender, GAP Insurance must be purchased privately from a separate licensed provider and could come with a higher price tag.
If your new car is totaled or stolen and you owe more on it than its current worth, the gap coverage covers the difference. The cost of gap insurance is fairly low, and it is easy to obtain, so theres no real reason NOT to have it.
GAP is supposed to cover the loss you would suffer if your loan balance is higher than the value of the vehicle. GAP is one of several optional add-on products such as extended warranties or credit insurance that a dealer will likely offer to you when purchasing or leasing a car.
Gap insurance will only cover what is left on your loan after an insurance company pays out. In other words, no, it wont cover the down payment you made initially because it wasnt part of the loan amount.
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