Buying or leasing a car comes with a lot of decisions. When it comes to getting the right kind of coverage, it pays to be informed before setting out on your car search. To help, we’ve put together a list of frequently asked questions to explain what GAP is and whether you need it.

What is GAP?

The minute your vehicle drives off the lot it depreciates by 11% and another 20% annually. If your car is stolen or declared a total loss, your insurance typically settles the value of your car on the date of loss, not for what it was valued at the time of purchase. If you didn't put much money down, you could owe more than the car's worth before you are even a block from the dealership!

Unless you have Guaranteed Asset Protection (GAP), which pays the difference between what you owe on the car and what it is worth in the insurance company's eyes. GAP insures you are covered so you are not stuck paying thousands of dollars on a loan for a car you no longer possess.

Who is GAP appropriate for?

GAP is designed to cover you in situations where you owe more than the car is worth. If you put very little money down or finance the vehicle over a longer term (more than 48 months), you should seriously consider GAP.

Is it just for new vehicles?

GAP is designed for all vehicles, new or used, and the cost can be financed with your loan. If you’re planning to put lots of miles on your vehicle, it’s going to depreciate faster, and GAP will help make up the difference in the case of a total loss.

Am I protected day one?

Yes! With a GAP waiver you are protected from day one/mile one, without any hidden catches or waiting periods. It also offers you credit rating protection because falling behind on your loan can harm your rating and make it extremely difficult to get another car loan in the future.

Is GAP worth the cost?

A GAP waiver costs far less than the out-of- pocket costs (rental car fees, deductible, and the cost of a replacement auto) you’ll incur if your car is damaged beyond repair. The cost for coverage is very low and you generally need it for just for a few years, until the gap between what you owe and what the car is worth closes. It may even cover your insurance deductible up to $1000 (depending on your state) as part of your settlement.

Can I buy a GAP waiver later?

No. You must buy GAP at the time of purchase or lease, and it goes into effect as soon as you drive off the lot, so it is highly recommended you purchase it from your dealer. They can roll it right into the loan or lease amount for built-in financing.

Does GAP cover you if you are at fault?

GAP doesn’t act as your auto insurance and has nothing to do with who’s at fault. Instead, it pays the difference, in the event of a total loss, between what you owe on the car and what it is worth in an insurance company's eyes.

How do I know my claim will be covered?

Guardia GAP is fully insured by A-rated insurance companies who A.M. Best considers excellent in financial strength and their ability to pay claims. We hope that you never have a claim on your waiver, but it’s great to have the peace of mind that we’re there if you do need us.