Guaranteed Auto Protection (GAP) offers protection against financial liability for borrowers who finance new or used vehicles. Designed with the borrower in mind, GAP helps protect the individual and the Financial Institution against financial loss in the event the vehicle is totaled or stolen and deemed a total loss. In today’s automobile market, during the first few years that a borrower owns a vehicle, the loan balance can be substantially higher than the actual cash value of the vehicle. As the vehicle’s value declines, the loan balance can remain significantly higher. If the vehicle were to be stolen or destroyed in an accident, the borrower would be liable to pay the difference between the insurance settlement (typically Actual Cash Value, ACV) and the outstanding loan balance.
SUNY Fredonia Federal Credit Union 2022