If you bought a vehicle recently or are thinking of purchasing a vehicle in the next few weeks, you may have come across a type of insurance that is offered by dealerships or lenders known as GAP insurance. Guaranteed asset protection insurance covers the “gap” of what you owe on the vehicle versus what the vehicle is worth when you drive it off the lot. GAP insurance helps cover the negative equity in your vehicle if it is totaled or stolen.

It’s recommended for you to get GAP insurance because your vehicle loses value once it is driven off the lot. Depreciation lowers the value of the vehicle and, depending on your loan amount, it could create negative equity. In the event that you don’t have GAP insurance and you have an accident or someone steals your vehicle, your insurance may not cover the entire loan amount and you could end up paying what is left.

This insurance is also recommended if you make a small down payment and can be purchased through the dealership or your preferred lender. You can pay for GAP insurance upfront or you can divide the cost and add it into your monthly loan payments. The average cost is around 5% of the annual comprehensive and collision insurance premium. 

There is a misconception that GAP insurance will cover everything that your regular car insurance does not. While GAP insurance is very helpful in an emergency, there are several things that GAP insurance does not cover, such as repairs on your vehicle if it is damaged in an accident, if you lose your job or are facing financial hardship. 

While GAP insurance is usually recommended if you make a down payment that is less than 20%, you are also able to get GAP insurance if you make a down payment that is larger than 20%. It is also recommended for those who have a loan term of more than 48 months or those who put a lot of miles on their vehicle. It is required to have GAP insurance if you lease a vehicle.   

This insurance offers peace of mind in the case of an accident or theft because you’d be protected from losing money on your vehicle. GECU offers GAP insurance at a low cost for members. Depending on your loan amount, it could cost from $400 to $550 and can be split into your loan term or can be paid up front. If you purchased GAP insurance and think you don’t need it anymore or changed your mind, you can cancel it at any time if you are paying it monthly during the life of the loan. The only requirement to get GAP insurance through GECU is to have a vehicle loan financed by GECU. If you are interested in adding GAP insurance to your vehicle or want to find out more information on pricing, call 915-778-9221.


The purchase of GAP insurance is not required to obtain a loan from GECU. GECU is an Equal Opportunity Lender.

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