Guaranteed asset protection (GAP) waivers and GAP insurance have several differences, and it’s important to know which one is the best option for your vehicle. Learn more about GAP waivers and insurance to see how to obtain each and their respective benefits.

What Is a GAP Waiver?

A GAP waiver helps protect you from financial issues if something happens to your car — like total loss or theft. You apply this document to your auto loan. In most cases, these waivers come directly from your lender and are rolled into your loan payment.

GAP waivers help cover the gap between your car’s actual cash value (ACV) and whatever you owe on your loan. The ACV is what your insurance should pay if you total your car, but that may be less than your loan. The GAP waiver helps you cover the difference and pay off your loan quickly.

What Is GAP Insurance?

GAP insurance has an almost identical function to a GAP waiver — the only difference is that it’s not part of your auto loan. Instead, you purchase it separately from a different licensed provider. As a result, GAP insurance could cost you more.

Another key difference is that this insurance is a monthly payment separate from your loan. You have to make all payments and keep the coverage active to benefit from this method.

To obtain GAP insurance, you’ll file a claim and wait for your insurance provider to approve it. Once they do, your GAP insurance policy should pay the remaining loan balance.

When Should I Get a GAP Waiver Addendum or GAP Insurance?

While not mandatory, these documents offer enough benefits to make them a worthwhile investment. Since cars experience depreciation and there’s always a possibility of an accident, GAP insurance and GAP waivers can give you some extra peace of mind. Adding a GAP waiver to your car loan or purchasing GAP insurance is most beneficial when you:

• Put little or no money down on your car.
• Have an underwater or upside-down loan.
• Drive more than the average person.
• Have a high interest rate on your loan.
• Own a vehicle that will depreciate quickly.
• Have a loan term that is 48 months or longer.

These scenarios make a GAP waiver or GAP insurance a worthy investment for your vehicle.

Refinance Your Auto Loan With RefiJet to Add GAP Coverage

If you want GAP coverage and already have a loan, you can refinance with RefiJet. Our team is committed to compliance and provides high-quality customer service to everyone we work with. Our personalized auto refinance process will help you save time and money and get GAP coverage.

Complete our online form to determine your eligibility and get started today!

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