What is GAP insurance and why is it important

Money Matters Blog for Cinfed Members

Protecting Your Investment by Filling the “GAP”

Posted on November 20, 2018
Topic Categories: Consumer Help

Wrecked car

By Michael Mason - Vice President, Lending 


If you’ve gotten a loan for a car or truck, you’ve probably heard of GAP insurance…maybe you’ve even purchased it. But exactly what is it and why is it important?


GAP stands for “Guaranteed Auto Protection.” GAP insurance is appropriate for almost any auto loan but is most important in situations with:

  • Low or no down payment;
  • A loan term of 60 months or longer;
  • A vehicle anticipated to accumulate above-average miles (higher mileage increases the rate of depreciation);
  • Negative equity from a trade-in vehicle.


GAP insurance covers the difference between the actual cash value of a vehicle (as determined by your insurance provider) and the balance still owed on the loan. GAP insurance is usually purchased up front, and can be financed as part of the loan.


Here’s an example of how GAP insurance works. Let’s say you bought a new car for $30,000. You made a down payment of $2,000 and financed the remaining $28,000 with an auto loan, for 60 months.


Re-paying the loan over five years means your monthly payments are relatively low – but those payments don’t keep up with the continual depreciation in the value of your car. 


So for most of those 60 months, your loan balance (the total amount you owe) is greater than the value of your car. During that time, if you have an accident and total the car, or the car is stolen, your insurance (or the at-fault party’s insurance) will only pay the replacement value of the car, not what you still owe on your loan. The difference is called the “gap” – which you will be responsible for, and could equal thousands of dollars. 


At Cinfed, we offer GAP insurance in conjunction with our auto loans. Our GAP coverage includes a deductible reimbursement even if the vehicle is not totaled, which means the personal deductible on the car insurance can be raised – saving members additional money.


Our GAP policies cover any autos in the home that are titled in the member’s name, and includes the deductible reimbursement benefit. It’s an outstanding value for members who use Cinfed for their auto loans.


GAP insurance can be well worth the investment to avoid costing you a lot of money in the event your car is totaled or stolen before it’s paid for. Ultimately, it gives you peace of mind for the length of your auto loan. 


Cinfed Credit Union
4801 Kennedy Avenue
Cincinnati, OH 45209
(513) 333-3800
Routing #242076656


My husband and I have been members of Cinfed for over 25 years. When he retired, we had limited involvement with Cinfed since it was very close to our workplace, but not our home. Recently we... 
— Cheryl, member since 1981
I have been a member of Cinfed Credit Union since 1986 when I started working for IRS. I recently spent a week in the hospital and four weeks in a skilled nursing facility going through rehab. The... 
— Suzanne, member since 1986
Cinfed is special for me. I moved to several states and Cinfed is the only account I kept with me wherever I go. Through the shared branching, I get all the service I need. Whenever I call, I am... 
— Tseagye, member since 2010
Cinfed rocks! I hope you guys understand that what you are offering are not just loans and accounts but things that mean much more than that, things that keep hope alive, that help people like me... 
— Pankaj, member since 2014
I joined Cinfed after my first season working for IRS in the early 1980's. Now over thirty years later, I am still impressed with them. Every customer service representation that I have been in... 
— Ros
I've been banking with Cinfed for almost one year now and it has been a wonderful experience. They get back to you very promptly and can help you for all of your banking needs, quite efficiently. I... 
— Brandon, member since 2014
I have been a member for over 25 years. I think good service should be recognized. Julie at the Roselawn branch always gives great service with a smile. She is also a very dedicated employee. ... 
— Rita, member since 1985
I have had most of my family to join. I will never change banks, the service is great.
— Joen, member since 1988
Love them as a bank and the customer service has always been outstanding...Great job Cinfed.
— Posey, member since 1984
We've only been members for a little over a month and already feel the difference. I don't want to name names, but let's just say Cinfed is WAY better than our previous institution that rhymes with... 
— Jeff, Dawn, & Jordan, members since 2013
I been a member since 1985 and can not imagine banking anywhere else. This credit union as taken care of my every need. 24/7 services is excellent.
— Edward, member since 1985
Just closed on a Home Equity line of credit loan, and the process couldn't have been any easier. With this I was able to pay off 2 high interest credit cards and deposited the rest into a checking... 
— Thomas
Recently I tried to locate the Oakley office using google maps. The google directions did not get me close to Cinfed. I called the office and Liz remained on the phone until I reached the... 
— Debbie G
As a long time member, I have always received great service from all CinFed employees. I just wanted to say a special thank you to Dee Dee Day and Dawn Strickland. I had to make some changes to... 
— John-Member since 1990
Earlier this year my much younger sister passed away and with that many obligations were to be met by my husband and myself ..My sister was survived by a daughter and son. We have since then taken on... 
— Vonda
How lucky I am to have Liz Frey managing the office I use! I live in Florida but maintain Cinfed as my main banking office. Everytime I need special help a simple email or call to Liz and it is... 
— Debbie G
Emily Snyder took the best care of my two auto loans. She was professional, courteous and very knowledgeable of the available services for me. She went out of her way to make sure I felt like I was... 
— Sarah Amyotte
I have been member with Cinfed since 1986. The Roselawn Cinfed staff greeted the customer phone calls friendly and polite willing to help you with your needs. They have excellent customer service.... 
— Marian Dudley

NOTE: You are leaving Cinfed Credit Union's web site. Cinfed is not responsible for content or security policies of this external, linked web site.