Automotive News: A tussle over GAP for military members
A change to the Military Lending Act, designed to protect service members, has instead left some in financial distress. And it has dealers, particularly those near military bases, wrestling with how to comply with the law.
While auto insurance covers the actual value of the vehicles, the quick depreciation of vehicles means the value is often less than a loan balance. Guaranteed asset protection — or GAP — covers the difference.
But to comply with the MLA, most dealerships no longer offer service members GAP, and most lenders haven't been able to finance it.
"This really is a ticking time bomb," Charlie Gilchrist, chairman of NADA and president of Gilchrist Automotive in Texas, told Automotive News. "We have to get it handled."
Read the full story and Assistant Executive Director Matt Nowel's quote by clicking here.