Guaranteed Asset Protection (GAP) Coverage

Eliminate the Awful Feeling of Being Upside Down

It’s a sad but not unusual scenario…

A vehicle is stolen, accidentally damaged beyond repair, or otherwise declared a total loss. The standard auto policy on it only covers the actual cash value of the vehicle, less the deductible. The borrower is then financially liable for any shortfall between the net insurance settlement and what is owed on their loan, the deficiency, which could be thousands of dollars on a vehicle that now needs to be replaced.

Helping borrowers understand that they are responsible for the financial gap between the actual cash value of their vehicle and the payoff amount of their loan in the event of a total loss is necessary.

Helping borrowers not get caught in the gap is a valuable service. 

HUB Financial Services enables you to offer GAP Coverage where*:

  • We bridge the gap between the actual cash value of the vehicle and the outstanding loan amount in the event of a total loss.
  • Our coverage extends to auto insurance deductibles of up to $1,000.
  • Protection remains effective for up to 84 months on loan terms up to 180 months.
  • Borrowers are relieved from the obligation of paying off a loan for a vehicle they no longer possess.
  • Personal credit ratings are safeguarded.
  • Our solution offers unparalleled peace of mind at a minimal cost.
  • Borrowers have the flexibility to choose and switch auto insurance providers as needed.

Additionally, lenders benefit significantly from our GAP Program. By reducing charge-offs and GAP exposure, more loans can be approved. Our efficient claims process ensures quick payment, mitigating negative borrower interactions due to deficiency loan balances. Furthermore, we foster customer loyalty by offering up to $2,500 toward the purchase of a replacement vehicle.*

What Is Guaranteed Asset Protection (GAP) Coverage for Lenders?

GAP covers the disparity between a vehicle’s value and the outstanding loan balance in the event of a total loss, safeguarding both the borrower and the financial institution.

Benefits of GAP Coverage for Financial Institutions:

  • Coverage for Total Losses: In the event of a total loss to the financed vehicle, gap waiver insurance steps in to cover the difference between the remaining loan balance and the actual cash value settlement provided by the auto insurer.
  • Versatile Coverage: GAP can apply to various loan types, including new and used vehicle loans, balloon loans, and leases.
  • Critical for Low/No Down Payment Loans: Particularly crucial for loans with minimal or no down payments, where the vehicle’s value may be significantly lower than the loan balance.
  • Suitable for Extended Loan Terms: Especially beneficial for loans with extended terms, as longer amortization periods increase the risk of gap exposure over time.
  • Advantages for Financial Institutions: Beyond borrower protection, GAP benefits financial institutions by maintaining customer relationships, averting deficiency balance write-offs, generating fee income, and promoting the financing of replacement vehicles by borrowers.
  • Flexible Offering: GAP can be presented as an optional purchase for individual borrowers or provided as a benefit across the entire loan portfolio.

With HUB Financial Services’ GAP Program, you can confidently support your clients through vehicle loss scenarios, ensuring their financial security and satisfaction.

* Subject to terms, conditions, limitations and exclusions set forth in the GAP Waiver Addendum. Lender GAP program parameters may vary.