WHAT IS A GAP WAIVER?
A GAP Waiver is designed to reduce or even eliminate amounts remaining on your loan after your vehicle is stolen or is declared a total loss.
When a vehicle is declared a total loss, due to theft or accident, the primary automobile insurance will typically pay the actual cash value of the vehicle at the time of loss. This amount can be less than the outstanding balance on the loan. The difference between the amount paid by the insurer and the remaining balance on the loan is often referred to as the "gap." The owner of the vehicle remains responsible for paying these amounts to the lender.
GAP Waivers can help limit this financial obligation by waiving some or all of what is owed, excluding certain items such as past-due payment amounts and late fees. GAP Waivers even include coverage for some insurance deductibles up to $1,000.
GAP Waivers are offered as an addendum to your auto loan so must be purchased during the financing transaction.