Featured F&I Product: GAP Coverage

One product that has traditionally been a staple in an F&I manager’s menu is GAP—otherwise known as Guaranteed Asset Protection or Total Loss Protection. It’s easy to understand why. GAP coverage is one of the easiest products to explain to customers—they “get” it. It is also a reasonably priced product on which a fair profit can be made. GAP coverage is often sold to customers who have negative or very little equity. With car values being on a roller coaster, it makes sense to expand the definition of a GAP customer. No matter what kind of equity is in the transaction, if the customer is financing for extended terms and/or puts above average miles on the vehicle, he or she may still find themselves in a deficiency position if the car is totaled. Jeram Marketing has different GAP products for different customers but all are full of solid, easy to understand benefits. Simply stated, in the event of a total loss, these products pay the difference between the outstanding loan balance and the greater of the primary insurance settlement or the actual cash value of the covered vehicle at the date of loss; whether the loss is due to an accident or to a theft. Deductibles of up to $1,000 are also covered. Some products even include credit toward the purchase or lease of a replacement vehicle from the same dealer. Without GAP protection customers who have experienced a total loss may be at risk of having to roll negative equity into a new finance agreement. In today’s lending market, that can mean the difference between getting approved or not; and getting approved at tier 1 rates or not. Talk to every customer about GAP coverage.