Even safe drivers fall victim to accidents that lead to financial hardship. Guaranteed Asset Protection, or GAP insurance, is there for car owners like you who need peace of mind and financial security.

What is GAP and how does it work?

If your car is deemed a total loss because of a wreck, or it is stolen, your insurer will cut you a check for the actual cash value of your car minus your deductible. But what happens if the actual cash value is less than what you currently owe on the loan or lease? This is where GAP comes in. Guaranteed Asset Protection pays the difference between the value of your car and its actual cash value (insurance payout).

Visual Comparison of GAP Payout vs CAR Insurance Payout

Let’s do the math

Let’s say you bought a car for $32,000. Unfortunately, you get in a wreck after owning the car for one year. The adjuster looks at your car and decides that your repair costs are more than the car's current value, therefore your car is totaled. Insurance cuts you a check for the actual cash value of your car, which is $25,000. The problem is you still owe $29,000 on the loan. You’re now stuck trying to find money to bridge the gap between what insurance paid you and your outstanding loan balance. This is where GAP kicks in and covers the $4,000 difference. 

MCP cancels the debt on shortfall between payoff and outstanding loan balance.


Shortfall between payoff and outstanding loan balance


Do you need GAP?

GAP insurance might be worth it if you:

  • Made little to no down payment on a new car

  • Are in a leased vehicle

  • Spend a lot of time on the road (depreciates your car faster)

  • Have a loan term longer than 48 months


What are your options at ALLIANCE?

Member Credit Protection (MCP) is a single premium waiver product that allows members to pay a one-time fee and have the comfort of knowing their assets are protected in times of loss.

MCP forgives a member’s outstanding indebtedness to ALLIANCE Credit Union if one of two events occur: 

  1. The member totals his/her auto and a shortfall exists; or

  2. The member unexpectedly dies during the term of the loan

The title is then given to your estate, free of any liens or encumbrances of the Credit Union.

Guaranteed Asset Protection (GAP) is insurance that covers:

  • Totaled vehicle or theft; and 

  • Negative equity, the gap between what you owe on your auto loan and the car’s actual value


Being prepared has never been this economical.

There is no way to predict an accident, but you can take steps to avoid having to pay off a car you no longer own.

"At ALLIANCE, we provide several different payment protection plans. Our GAP and MCP are our most beneficial products that we offer. Since January 2020, our GAP and MCP programs have paid out over $50,000.00 in claims and benefits to our members. Those members not only had the peace of mind of not having to pay that negative equity in a totaled vehicle, but also received $1,000.00 into their Shares Account."

- Tim McClellan, VP of Consumer Lending

If you are interested in GAP or MCP, reach out to one of our lenders by clicking HERE.