New Law Provides Free-Look Period on GAP Waivers for Consumers in the Market for a Vehicle
JACKSON, Miss. — People who buy a car and purchase a GAP waiver in Mississippi now have added peace of mind thanks to a new law championed by the Guaranteed Asset Protection Alliance (GAPA) that took effect Sunday.
This state law — enacted via Mississippi Senate Bill 2929 — establishes a 30-day free-look period on GAP waivers that will allow anyone to cancel his or her waiver and receive a full refund of the purchase price. This free-look period allows Mississippians ample time to understand the utility of their GAP waivers before fully committing.
“A GAP waiver is an important option for folks financing an automobile purchase as it can mean the difference between making payments on a vehicle you can’t drive if you total it and having that debt waived,” said Tim Meenan, Executive Director of GAPA. “Our association is proud to have played a role in the passage of this important legislation that protects consumers and fairly regulates the industry.”
When a vehicle is totaled, there is often a difference between what auto insurance pays out to the borrower (value of the car) and the amount still owed on the finance agreement. A GAP waiver is an agreement between a borrower and finance company to cancel up to all of the existing debt after a total loss.
The new law also establishes new rules surrounding disclosure and cancellation of GAP waiver contracts. The law stems from GAPA’s initiative to utilize the association’s model act for authorizing GAP waivers in states all across the country.