SGI’S Guaranteed Automobile Protection (GAP) plan provides financial security for borrowers.
The actual cash value of a vehicle typically depreciates faster than monthly payments reduce the outstanding balance of the loan.
If a vehicle is totaled or stolen, the borrower's insurance company settlement is based on the vehicle's actual cash value. This value could be significantly less than the outstanding loan balance. This difference creates a gap in coverage.
With GAP, the borrower can protect themselves from just such a scenario because it assumes the liability and covers this deficiency balance. Without GAP, borrowers may end up concurrently paying for a totaled vehicle and its replacement.