What is GAP Insurance?

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Have you ever wondered, “What is GAP Insurance?” The three letters in GAP stand for Guaranteed Asset Protection, but what is GAP protection actually for? Simply put, GAP insurance covers the difference between your remaining loan balance and the real value of your model. Our finance center recommends it for any driver who wants to avoid loan payments on a totaled car.

What is GAP Insurance on a Car?

Now you know the basics, but you might still have questions about how GAP insurance actually works. Here’s one common example:

  • Let’s say you still owe $20,000 on a loan which you used to purchase a new car. It’s been in your possession for a while, and the true value of the car has gone down faster than the loan balance.
  • If you get in a crash and total your car, and you have insurance, the insurance company will pay out the value of your car as compensation. If your vehicle’s true value is $18,000, you’ll still be $2,000 under water.
  • This is where GAP insurance kicks in. The driver who chooses this option will receive $20,000, not $18,000, in the event that their car is totaled.

Is a collision the only circumstance in which you’ll be covered by GAP insurance. Not at all. Coverage for cases of theft, fire, vandalism, and nature damages will all be included. Still have questions about what GAP insurance covers? Our team can help.

Is Gap Insurance Worth It?

Whether you lease or loan, GAP insurance helps you to avoid the worst possible consequences of accidents and collisions. You may have heard that new vehicles can start to depreciate as soon as they leave the lot, but of course, your loan balance won’t go down quite as easily or automatically.Do you still want to be making payments on an old loan after your car has been hauled away? If not, you’ll want to talk to a finance expert about GAP coverage.

How Can I Get Gap Insurance?

Most drivers procure GAP insurance through their regular insurer, or through their trusted dealership. Although it’s not required in Mehlville, Fenton, or anywhere else in Missouri, it certainly is affordable. You might be able to purchase GAP coverage for as low as $20 a year, with an additional 1-time fee at the point of purchase.

blue 2019 jetta on highway

Talk to Our Financing Team for More Tips!

Gearing up to purchase a new or used car? Learn more about liability insurance and comprehensive coverage to find out exactly what you’ll need. If you ever have questions, you can send us a direct message using our contact form!


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6000 S Lindbergh Blvd. • St. Louis, MO 63123

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Phone: 314-892-8200

6000 S Lindbergh Blvd. St. Louis, MO

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Phone: 314-892-8200

6000 S Lindbergh Blvd. St. Louis, MO

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6000 S Lindbergh Blvd. St. Louis, MO
38.5208643 -90.3438767
Suntrup Volkswagen 38.5208643, -90.3438767.