Coverage Gap
Gap waives the difference between what you owe on your vehicle and what your insurance company will pay* In the unfortunate event your vehicle is declared a total loss due to an unrecoverable theft or accidental damage, your auto insurance company will typically pay the current market value of your vehicle less your deductible. But what if your loan or lease balance is higher than the market value of your vehicle? Answer: You would be responsible for paying off the difference, including your deductible. This can be expensive.
The reason for the potential difference is that normally the loan/lease balance decreases at a predictable amount as monthly payments are made. However, the market value of your vehicle is influenced by several variable factors (e.g. supply, demand, mileage). This means that market value often may be lower than your outstanding balance – particularly early in your contract when you have the most to lose.
Guaranteed Asset Protection (GAP) can help waive the difference from the current market value of your vehicle.
Based on your insurance company paying NADA Retail Value for the vehicle at the time of loss. The amount waived will not include any amount financed in excess of 120%** of the MSRP for new vehicles or 120%** of the NADA average retail value for used vehicles on the date of contract.**The percentage may vary. See the GAP addendum for specific details.
THE CHOICE IS YOURS
GAP is an optional form of protection available only at the time you sign your Retail Finance or Lease Contract with the dealership. If you would like to know more about GAP, ask to see the GAP addendum. Besides the limitations listed below, terms and conditions may vary by state.
ARE YOU PREPARED TO PAY THE DIFFERENCE?
Is the amount you receive from your insurance company enough to pay off your loan or lease balance if your vehicle is declared a total loss?
| Insurance Settlement | |
|---|---|
| Market value of vehicle | *$13,000 |
| Amount you owe on loan or lease | $18,500 |
Limitations
DEDUCTIBLE
You are responsible for the entire amount of your physical damage insurance deductible. See the GAP addendum for specific details.
REFINANCE
GAP coverage is terminated if the Retail Installment Sales Contract is refinanced.
SETTLEMENT DEDUCTIONS
GAP waiver amount does not include insurance settlement deductions for customer retained salvage, unrepaired physical damage, towing, rental or storage.
NON-COVERED FINANCE ITEMS
GAP waiver amount does not include late payments, deferred payments, late charges/interest or interest after the date of loss.
LOST EQUITY
GAP does not refund advance payments or vehicle equity.
UNCANCELLED ADD-ONS
GAP waiver amount does not include the refundable portion of any finance additions such as credit insurance or service agreements.
CUSTOMER SECURED FINANCING
GAP does not apply to any loan obtained from any finance source other than the dealer.
INSURANCE
GAP does not provide any insurance coverage for you or the vehicle, such as collision, comprehensive, bodily injury, property damage or liability. You must have or obtain physical damage insurance on your vehicle at the time of purchase in order for GAP to be effective. GAP is not a replacement for primary auto insurance.
If you’re interested or want more information about GAP Coverage Plan in Kingsport, TN, drop by Honda of Kingsport at 2217 E Stone Dr. We look forward to serving our customers from Bristol and Johnson City!
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[2]Hybrid Models - Ratings determined by EPA. Use for comparison purposes only. Your MPGe/MPG and driving range will vary depending on driving conditions, how you drive and maintain your vehicle, battery-pack age/condition and other factors.
[3]Based on the J.D. Power U.S. ALG 36-month residual value forecast for 2022 mainstream models. For J.D. Power 2022 award information, visit jdpower.com/awards.
[4]Government 5-Star Safety Ratings are part of the U.S. Department of Transportations New Car Assessment Program (www.safercar.gov). Model tested with standard side airbags (SAB).
[5]View U.S. News Best Cars at https://www.usnews.com/cars.
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[7]Some vehicles may have dealer installed options that are not included in the price.