Rising prices and rapid depreciation
Vehicle prices continue to rise while the value of vehicles depreciates quickly.
Guaranteed Asset Protection
Help protect borrowers from the financial gap after a total loss.
When a financed vehicle is totaled or stolen and not recovered, the insurance settlement may be less than the outstanding loan balance. GAP can help reduce or waive a qualifying deficiency balance, subject to the program agreement.
Why GAP Is Important
More borrowers face a potential gap between vehicle value and loan balance.
Market and lending trends can leave consumers owing more than their vehicle is worth. If that vehicle becomes a total loss, primary insurance generally pays based on the vehicle's value rather than the full amount still owed on the loan.
Negative equity
It is more common than ever to finance negative equity from a prior vehicle.
Higher loan-to-value financing
Financial institutions are requiring little to no down payment and are financing over retail.
Longer loan terms
Longer loan terms are becoming more common, which can extend the time a borrower may owe more than the vehicle is worth.
More total-loss events
Vehicles are being totaled at a much higher rate than in the past.
How GAP Works
Protection when insurance leaves a balance.
The exact benefit depends on the signed GAP agreement and the facts of the claim.
01 / TOTAL LOSS
A covered vehicle is declared a total loss
The borrower's primary insurer determines the vehicle is totaled, or the vehicle is stolen and not recovered, subject to program terms.
02 / INSURANCE
Primary insurance settles the vehicle claim
The insurer pays the covered value of the vehicle according to the auto insurance policy.
03 / GAP REVIEW
The eligible deficiency is reviewed
GAP may reduce or waive the qualifying difference between the insurance settlement and eligible loan balance.
Program Benefits
Meaningful protection for borrowers and lenders.
A well-supported GAP program can add value throughout the vehicle lending relationship.
Borrower protection
Helps prevent an eligible deficiency balance from following a borrower after the financed vehicle is gone.
Financial institution support
Adds a practical protection option to the loan process and helps manage qualifying total-loss deficiencies.
Simplified administration
Auto Exam supports implementation, staff training, technology, reporting and ongoing account service.
More than a product
A GAP program built around your financial institution's lending workflow.
Auto Exam Program Support
Implementation and service from an experienced partner.
Auto Exam helps financial institutions select, launch and manage protection products that fit their lending programs and member needs.
- Program setup and implementation support
- Simple contracting and reporting technology
- Staff product and workflow training
- Dedicated account management
- Ongoing program review and support
Important: GAP is subject to the terms, conditions, limitations, exclusions and eligibility requirements of the applicable agreement. GAP is not a substitute for automobile insurance. Product availability and benefits may vary by state, provider and financial institution.
Ready to review your GAP program?
Talk with Auto Exam about implementation, training, technology or adding GAP to your product offering.