GAP coverage stands for “guaranteed asset protection”. It covers the difference between the amount you owe on your car and the actual cash value of the vehicle.
You don’t want to owe more on your car than it’s worth (“upside down”) if your car is totaled or if it’s stolen and not recovered. For example, if your auto loan amount is $20,000 and your insurance settlement is $15,000 (ACV), GAP coverage would cover the $5,000 additional loan amount.
Look into GAP coverage if you have a loan with a 72 month term or longer, you put less than 20 percent down of the total price when you bought the car, you’re talking out a loan to buy a new vehicle, or you plan to put lots of miles on the car, therefore reducing its value.
To get GAP coverage with your auto insurance, visit AAA.com/insurance or call 877-580-4737. To get GAP with your auto loan, visit AAA.com/AutoBuying or call 844-541-2886.
If you’re not an AAA member and want to find out if GAP coverage is an option for your existing Meyer Insurance auto policy, call us at 608-643-3000.
Adapted from the AAALiving article: Got GAP?
