To continue enjoying all the features of Navy Federal Online, please use a compatible browser. You can confirm your browser capability here.

Bottom Line Up Front

  • Guaranteed Asset Protection (GAP) coverage could be a smart choice for buyers purchasing a new car with zero or no money down. 
  • In the event of a total collision or theft, GAP may cover the remainder of your auto loan.
  • Research GAP coverage before you buy a car to find the best price and payment schedule.

Time to Read

2 minutes

August 5, 2022

There’s a lot to like about owning a new car—that is, unless it gets stolen or involved in a serious collision. In those situations, you might expect your car insurance policy to cover the remaining cost of your unsalvageable vehicle. Unfortunately, even the best plans may not cover the rest of your outstanding loan, creating a loan “gap” on the money you owe. That’s where Guaranteed Asset Protection (GAP) comes in.

What Does GAP Do?

If your car is totaled in an accident or is stolen and not recovered, you should receive a settlement from your insurance company based on the market value of the vehicle. However, this amount may not cover the rest of your loan. 

If there’s still money owed, GAP may help pay:

  • The outstanding loan amount
  • A portion of your insurance deductible (up to $1,000 with Navy Federal Credit Union)

What Isn’t Covered by GAP?

While GAP is useful, it doesn’t cover:

  • An extended warranty added to your car loan
  • Maintenance or mechanical repairs for your vehicle
  • Other miscellaneous exclusions and limitations. Make sure you read and understand the GAP agreement.

When Is GAP Useful?

You should consider GAP if:

  • Your loan had a zero or low down payment
  • You have a lease (this may be automatically included)
  • Your car make and model depreciates quickly
  • You drive more than 15,000 miles a year (accelerating your car’s depreciation)

How Can You Buy GAP?

Many car dealers and auto insurance companies offer GAP, in addition to some financial institutions. The cost can vary depending on the value of your car and whether or not it’s a lease. In many cases, you’ll pay for GAP in one lump sum, which can cost up to $600 or more. 

Some companies offer GAP as a recurring monthly or yearly payment instead. In general, expect prices to be higher at car dealerships. At Navy Federal, GAP can be purchased at a flat fee of $399 during your loan application process.1

Is GAP Worth It?

If you’re purchasing a car with little or no money down, or if your car loan has 5 or more years on it, you could benefit from GAP should anything happen to your car. You may be required to purchase GAP if you have a car lease, but requirements vary, and you may not be able to choose where you purchase GAP from.

Is There a GAP in Your Coverage?

Your auto insurance may not be protecting you completely. Navy Federal’s Guaranteed Asset Protection helps you fill in the gap. Learn more about the benefits of GAP and enroll today.

Key Takeaways Key Takeaways



Your purchase of Guaranteed Asset Protection (GAP) is optional. Whether or not you purchase GAP will not affect your application for credit or the terms of any existing credit agreement you have with Navy Federal. You may choose to pay the fee in a single lump sum or you may finance it into your loan, which would increase the cost (NOTE: California Active Duty and Active Reserve Duty servicemembers cannot finance the fee). If you cancel your optional GAP coverage within 60 days of enrollment, you will receive a full refund of any fees. Additional information will be provided to you, which will include a copy of the GAP Agreement and Disclosure (NFCU23A) containing the terms of the plan. There are eligibility requirements, conditions, and exclusions that could prevent you from receiving benefits under the plan. You should carefully review the additional information for a full explanation of terms.

This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.