GAP Insurance
Understanding GAP Insurance
The difference between your vehicle’s actual cash value and the remaining amount on your lease payout is known as the “GAP.” We offer GAP protection to cover this difference, ensuring our customers are not left paying out of pocket if an insurance claim falls short. Contact our financing team today to take advantage of this service!
What is GAP Insurance?
Guaranteed Asset Protection (GAP) insurance is designed to protect you if you owe more on your loan than your equipment’s worth. This situation often occurs when you purchase equipment that depreciates quickly in the first few years, leaving you with a significant remaining loan balance.
How GAP Insurance Works
- Depreciation: Equipment loses value immediately after purchase. If your truck, trailer, or reefer is involved in an accident or stolen, your insurance typically pays the current market value, which may be less than your remaining loan balance.
- Coverage Gap: In cases of total loss or theft, the insurance settlement might not cover the outstanding loan amount, leaving you to pay the difference.
- GAP Insurance Coverage: GAP insurance covers this "gap" between the actual cash value and the remaining loan balance. If your equipment is totalled or stolen, GAP insurance will pay the difference up to the policy limit.
Why Consider GAP Insurance?:
GAP insurance is optional but can be beneficial, especially if you:
- Finance equipment with a minimal down payment
- Have a loan term longer than 48/60 months
The cost of GAP insurance varies based on factors like the value of your equipment, loan length, and driving history. For peace of mind and financial protection, consider adding GAP insurance to your coverage plan.