GAP - Auto Loan Protection

Guaranteed Asset Protection (GAP) coverage is your shield against financial uncertainties in the event of vehicle theft or total loss.

Talk to an Auto Finance Specialist

Car insurance payout example showing GAP coverage bridging a $4,000 gap that car insurance did not cover

Total Confidence with GAP¹ Coverage

When theft or accidents resulting in total loss occur, standard insurance typically reimburses you for the market value of your vehicle. However, this might not be enough to cover the remaining balance on your loan. This is where GAP coverage steps in!

Financial Security: Avoid unexpected expenses and protect your financial well-being with GAP coverage.
Peace of Mind: Drive confidently knowing that you're covered in the event of a total loss or theft.
Versatility: From motorcycles to travel trailers, our GAP coverage extends to a wide range of vehicles.

Talk to an Auto Finance Specialist

Example: How GAP Coverage Works

Scenario:

Car purchase price: $30,000
Loan amount: $30,000
Insurance payout (after accident): $24,000
Remaining loan balance at time of loss: $28,000
GAP coverage: Purchased at time of loan

What happens:

Six months after buying the car, you're unfortunately in a major accident. Your car is declared a total loss by your insurance company.

Your car’s actual cash value (ACV) is now $24,000 due to depreciation.

You still owe $28,000 on your loan.

Insurance pays $24,000 toward your loan balance.

You're left with a $4,000 “gap” on a vehicle you can no longer drive.

Read/Download FirstGuard GAP Brochure

How GAP can help:

Since you purchased GAP coverage, it will cover the $4,000 difference, so you don’t have to pay it out of pocket.

Without GAP:

You would have to pay that $4,000 balance on a car you no longer have.

Quick Breakdown:

GAP Coverage Example Breakdown

Loan Balance: $28,000

Insurance Payout: $24,000

Gap Remaining: $4,000

Paid by GAP: $4,000

Out-of-Pocket: $0

GAP protects you from financial loss if your car is totaled or stolen and the insurance settlement is less than your remaining loan or lease balance. It’s especially useful in the early years of financing when depreciation outpaces loan repayment.

Questions? We can help.

Monday - Friday 9AM - 6PM
and Saturday 10AM - 2PM CT

Talk to an Account Specialist
972-705-4840

You can also text us at:

Monday - Friday 9AM - 6PM
and Saturday 10AM - 2PM CT

Talk to a Jr. Auto Finance Specialist
469-847-5827

When GAP Coverage May Be Needed

Extended Loan Term

Opting for a loan period beyond 60 months might lower your monthly payments, but it also extends the duration over which your vehicle depreciates. This can exacerbate the gap between the vehicle's value and the remaining loan balance.

Rolling In Debt

When you trade in a vehicle and roll the outstanding balance of your previous loan into the new loan, you're essentially adding debt onto your new vehicle's loan. This can quickly widen the gap between what you owe and the vehicle's actual value.

High Mileage Impact

Vehicles depreciate with mileage, and if you frequently drive long distances, the value of your vehicle can decline rapidly. This accelerated depreciation can leave you with a significant gap between your loan balance and the depreciated value of your vehicle.

Luxury Depreciation

Luxury cars and SUVs often depreciate faster than their less expensive counterparts. The initial high value of luxury vehicles can plummet quickly, leading to a substantial disparity between the loan amount and the vehicle's depreciated value.

Low Down Payment

Financing a vehicle with less than 20% down payment means you're borrowing a larger amount relative to the vehicle's value. As the vehicle depreciates, this gap between the loan amount and the vehicle's worth widens, leaving you financially vulnerable in the event of a total loss.

No Equity Accumulation

In the initial stages of a loan, your vehicle's value may depreciate faster than you're paying down the loan balance. This means you could be "upside-down" on your loan, owing more than the vehicle is worth.

Hit the highway — your way.

Auto Loans

General Guaranteed Asset Protection (GAP) FAQs

If I already have full coverage insurance, do I still need Gap coverage?

Full coverage insurance typically pas the actual cash value (ACV) of your vehicle if it’s totaled, which may be less than what you owe on your loan. Gap coverage is designated to pay the difference between your insurance payout and your remaining loan balance.
Whether you need GAP depends on your financial situation, loan terms, and comfort with potential out of pocket costs if your car is declared a total loss.

Is Gap worth the money?

Yes, GAP is a good option for the following types of drivers: Drivers who owe more on their car then the car is worth. If you are currently making car loan payments, be sure to calculate the loan balance and weigh it against your car's current cash value. You should strongly consider GAP Protection.

Is purchasing GAP mandatory?

No, purchasing GAP is voluntary. The terms of the credit and the vehicle sale cannot be conditioned upon the purchase of GAP.

How do I know if GAP is the right choice for me?

If you're uncertain whether GAP coverage is suitable for you, consider the following questions:

1. Do you owe more on your loan than your vehicle is currently worth?

If this is the case, we recommend getting GAP coverage.

2. Do you have enough savings to cover the difference between what you owe and your vehicle's worth?
If you don't have sufficient funds to pay the difference, or if you'd prefer not to pay it out of pocket, we suggest that you obtain GAP coverage.

How do I submit a GAP claim?

If your vehicle is involved in an accident or incident that may result in a total loss, start by contacting your insurance company to confirm. Once your insurance has deemed your vehicle a total loss, contact us at 800-970-3302. We will guide you through the next steps and file the GAP claim on your behalf.

Big thanks to Ryan Melton who assisted me with my Auto Loan yesterday. He provided some great tips and knowledge and made it an easy process. Great that Credit Union of Texas has employees who care and are looking out for their customers best interest.

Brian Reagan.

I’ve been a member for almost 30 years, I can’t imagine banking anywhere else. You’re more than another account at CUTX, you’re a member, you’re a family.

Elsa H.

The stuff, loan team and customer service were very helpful throughout my car loan process. Credit Union of Texas was able to offer me the best rate available for my vehicle. I would highly recommended CUTX to all of my friends and family.

Abebe A.

^{1. Guaranteed Asset Protection (GAP) can be purchased when originating or refinancing an auto loan with Credit Union of Texas (CUTX). Auto Protection Program offered through our third-party affiliate. Additional terms and conditions may apply. Certain restrictions and limitations may apply. Not all vehicles are eligible for coverage. Membership required}