GAP Insurance

2. Protect Your Finances from a Total Loss

When your car is declared a total loss, your primary auto insurance will only cover the current market value of the vehicle—not what you still owe. This can leave you financially exposed, especially if:

🚗 You financed with a low or no down payment
🚗 You rolled over negative equity from a previous loan
🚗 Your loan term is longer (72+ months), making it slower to build equity
🚗 You drive a lot, accelerating depreciation

Without GAP insurance, you could end up paying for a car you no longer own while trying to secure financing for a replacement.

💡 With GAP insurance, your remaining loan balance is paid off, allowing you to walk away debt-free and move on to your next vehicle.

3. Avoid the Risk of Bias with Personal Insurance Companies

One overlooked issue when relying solely on your personal auto insurance for coverage is that they decide whether your car is a total loss—and that decision isn’t always in your best interest.

⚠️ Why? Insurance companies lose money when they pay out a total loss claim. If they insure both your vehicle and the payout itself, they have an incentive to minimize your claim.

This could mean:
❌ Underestimating your vehicle’s market value to reduce their payout.
❌ Refusing to total the vehicle and instead approving partial repairs—even if they leave you with a diminished-value car.
❌ Delaying the claims process, forcing you to pay for a rental car longer than necessary.

💡 By securing GAP insurance from a third-party provider (rather than relying on your insurer’s loan/lease coverage), you ensure an unbiased, guaranteed payout if your vehicle is totaled.

4. Small Investment, Big Protection

GAP insurance is affordable compared to the financial risk of being stuck with negative equity.

💰 Cost Breakdown:

  • Adding GAP insurance to a loan usually costs $400-$700 as a one-time payment or $10-$20 per month if financed.

  • Compare this to paying thousands out-of-pocket if your car is totaled.

5. When Do You Need GAP Insurance?

GAP insurance is highly recommended if:

✔️ You’re financing more than 80% of the vehicle’s value
✔️ Your loan term is 60 months or longer
✔️ You put less than 20% down
✔️ You drive high mileage (fast depreciation)
✔️ You rolled over negative equity from a previous vehicle

The Bottom Line: GAP Insurance Saves You Thousands & Protects Your Financial Future

If you’re financing over 80% of your car’s value, GAP insurance isn’t just an option—it’s a necessity. It prevents financial disaster by covering the difference between what you owe and what your insurance pays if your car is totaled.

At The 615 Middle Man, we help clients secure affordable, high-quality GAP insurance that provides real protection—without overpaying. 🚗💰

💡 Want to make sure you’re covered? Contact us today, and we’ll help you get the best GAP insurance at the best price!

Why GAP Insurance is Essential When Financing Over 80% of Your Vehicle’s Value

When financing a vehicle, most buyers focus on monthly payments, interest rates, and loan terms—but what happens if your car is totaled in an accident or stolen? If you’re financing more than 80% of your vehicle’s value, you could owe thousands more than what insurance will pay in the event of a total loss. This is where Guaranteed Asset Protection (GAP) insurance becomes a crucial financial safeguard.

Let’s break down why GAP insurance is a must-have when financing a high percentage of your vehicle’s value and how it can save you from unexpected financial disaster.

1. The Depreciation Problem: Why You Could Owe More Than Your Car Is Worth

The moment you drive a new car off the lot, it depreciates—fast. In fact, a vehicle can lose 10-20% of its value within the first year and up to 50% over five years.

If you finance over 80% of the car’s value, this creates a negative equity gap—meaning you owe more than the car is worth.

🔻 Example Scenario:

  • You buy a car for $40,000 and finance $38,000 (95% of its value).

  • Six months later, the car’s market value drops to $34,000, but you still owe $36,500.

  • If the car is totaled, your insurance company only pays the market value of $34,000.

  • Without GAP insurance, you’d be stuck paying the $2,500 difference out-of-pocket—plus your deductible.

With GAP insurance, that $2,500 negative equity would be covered, leaving you with zero out-of-pocket expenses for the loan balance.