What You Need to Know About GAP Waivers This Memorial Day Weekend
Taking advantage of Memorial Day markdowns and the start of summer car-selling in the coming days and weeks? You’re not alone; industry news outlets are sharing the best Memorial Day car deals and game plans for shopping during this busy time. Most important, though, is understanding the best way to maximize a great deal with a GAP waiver:
What’s a GAP waiver?
A guaranteed asset protection (GAP) waiver is created to relieve some or all the difference between what you owe on an automobile finance agreement and what auto insurance pays to the borrower if your car is a total loss or stolen.
Why should I get GAP?
For many drivers, a standard auto insurance policy provides only enough protection to cover the actual cash value of a vehicle that is damaged or stolen. If the car’s actual cash value is lower than the amount owed on the loan or lease, that difference – the “gap” – is often not covered by insurance. The borrower is still responsible for paying the amount left on the finance agreement. With a GAP waiver, your lender would waive payment of some or all of that remaining balance,.
With Memorial Day weekend comes the kickoff of AAA’s “100 Deadliest Days” – a warning that the 100 days immediately following Memorial Day are the most accident likely time for teen drivers. Throughout summer, the number of crashes involving teenage drivers increases significantly. Any parent’s instinct is to remind their teen to put the phone away while driving, follow the speed limit, and consider driver education programs. While anyone can end up in a car accident, it’s important to take this season into consideration if you’re buying a car and have teen drivers. A GAP waiver is the best way to protect your wallet after a total car loss.
When can I get covered?
A GAP waiver can be purchased at the dealership or your financing institution at the time you purchase or lease a vehicle.