Ally's Gap Insurance Refund Policy

Guaranteed Asset Protection (GAP) coverage helps protect a buyer or lessee in the case of total loss. It helps bridge the gap between how much is owed for the vehicle and how much the car is worth if it is totaled or stolen. If you decide to cancel your vehicle service contract or GAP addendum, you can call Ally at 1-800-631-5590. If you cancel within 60 days and haven't filed any claims, you can receive a full refund. If you've filed any claims or it's after 60 days, your refund will be prorated. An administrative fee may also apply.

Ally's new policy on GAP refunds

Allys' New Policy on GAP Refunds

Ally Financial has recently made changes to its Guaranteed Asset Protection (GAP) refund policy, aiming to streamline the process and ensure customers receive their rightful refunds. This updated policy, enforced in late June 2017, was announced in response to allegations against Wells Fargo for failing to properly refund borrowers who purchased GAP from its dealer services unit and paid off their loans early.

Overview of the New Policy

Ally's new GAP refund policy instructs dealer partners to refrain from handling GAP refunds directly with customers. Instead, for early retail account payoffs received after August 1, 2017, Ally will directly refund the unearned portion of GAP waivers and insurance to customers within 45 days of the paid-in-full date. This approach ensures that customers who prepay their auto finance contracts in full before maturity promptly receive their GAP refunds.

The Process

Upon receiving an early retail account payoff, Ally sends a digital notice to the dealership, alerting them of the early payoff and the possibility of a GAP refund for the customer. Dealers then have 15 calendar days to review their records and inform Ally if the GAP refund was already used toward a new transaction or if the GAP contract was previously cancelled at the customer's request.

If the dealer does not respond within the given timeframe, Ally will debit the dealer's reserve account for the refund amount, including a $10 administrative fee. A dealer chargeback letter is then sent, notifying the dealer of the early payoff, refund amount, and administrative fee.

In cases where the GAP refund has not been remitted, dealers must notify the product's administrator to cancel the GAP policy and forward any refunds to the dealership. Subsequently, Ally issues the refund to the customer. If the refund was used as trade-in credit, Ally debits the dealer's reserve account for the refund amount, including the administrative fee.

Ally's updated GAP refund policy underscores its commitment to doing right by its customers and ensuring compliance with regulatory requirements. By centralizing the refund process, Ally provides clarity and peace of mind to customers, knowing they will receive their GAP refunds without delay. This proactive approach to customer service and regulatory compliance sets a positive precedent in the industry.

GAP coverage and what it includes

GAP insurance, or Guaranteed Asset Protection, is an optional product that covers the difference between the amount you owe on your auto loan and the amount your insurance company pays out if your car is stolen or totalled. This is particularly important if your loan balance is higher than the value of the vehicle.

GAP insurance is one of several add-on products that a dealer will likely offer when purchasing or leasing a car. The cost of the product is included in the loan amount. GAP insurance is also available from your auto insurance company or direct lenders. It is important to compare prices and coverage before purchasing.

If you decide to sell your vehicle, you can transfer your vehicle service contract to the new owner by filling out a transfer form and paying an administrative fee. Be sure to notify Ally within 30 days of the date the vehicle ownership is transferred. You can also cancel your GAP addendum by calling 1-800-631-5590. If you cancel within 60 days and haven't filed any claims, you can receive a full refund. If you've filed any claims or it's after 60 days, your refund will be prorated and an administrative fee may apply.

Ally's GAP insurance covers the difference between what a vehicle is currently worth (which your standard insurance will pay) and the amount you owe on it. This is particularly important if you have only made a small down payment on the vehicle, as the amount of the loan may exceed the market value of the vehicle in the early years of ownership.

How to cancel Ally Premier Protection coverage

To cancel your Ally Premier Protection coverage, you can call Ally at 1-800-631-5590. If you haven't made any claims and cancel within 60 days of the start of your contract, you can receive a full refund. However, if you have made any claims or it has been more than 60 days, your refund will be prorated based on the days or miles of coverage remaining, whichever is least. There may also be a $50 administration fee.

Paid claims prior to cancellation will be deducted from refunds where applicable or required by state regulation or law. Refer to the cancellation terms of your Ally Premier Protection contract for more detailed information.

If you decide to sell your vehicle, you can transfer your vehicle service contract to the new owner by filling out a transfer form and paying an administrative fee. Be sure to provide the buyer with any maintenance records you have kept. You must notify Ally within 30 days of the date of vehicle ownership transfer, or the APP contract will no longer be valid.

How to get reimbursed for vehicle repairs

If you have taken out an Ally Premier Protection plan, you can get reimbursed for vehicle repairs. This plan covers the cost of most vehicle repairs and may also include additional benefits that your manufacturer warranty doesn't cover, such as towing, roadside assistance, rental or alternate transportation compensation, and trip interruption reimbursement.

To get reimbursed for vehicle repairs, you can take your vehicle to any licensed repair shop in the U.S. or Canada and tell the service advisor what level of Ally Premier Protection you have. Representatives from Ally will then work with the service advisor to determine whether the repairs are covered under your plan.

If your vehicle breaks down, you should arrange for it to be taken to a licensed repair facility. Make sure to inform the service advisor of your level of Ally Premier Protection coverage. Once the mechanic determines the repairs needed, you can get approval for rental or alternate transportation if the repair meets the qualifications of your Ally Premier Protection service contract.

Authorization from Ally must be obtained before your mechanic can do any work on the vehicle. Depending on your contract, you may have to pay a deductible for repairs.

If you have already paid for repairs, you can call Ally at 1-800-631-5590 to request reimbursement.

How to file a GAP claim

If you have been in a car accident and your vehicle has sustained enough damage to be declared a total loss, you may need to file a GAP claim. Here is a step-by-step guide on how to do this:

• Find out if you have GAP coverage and the contact information for the GAP provider. GAP insurance is not mandatory, so you may not have purchased this coverage.
• Contact the GAP provider and inform them of the total loss, providing them with your last name, ZIP, and VIN to start the claim.
• Gather the required documents for processing the claim. These may include:

• Original purchase contract from the seller.
• Copy of the GAP policy contract.
• Payment history ledger from the lienholder.
• Copy of the collision report.
• Letter from the insurance company showing acceptance of liability.
• Copy of the valuation report from the insurance company documenting the value of the vehicle and total loss amount.
• Proof of cancellation of any other coverages, such as an extended warranty.
• Copy of the check to the lienholder from the insurance company paying the total loss.
• 10-day payoff amount from the lienholder.

• Submit the required documents for processing.
• The GAP provider will review the required documents within the specified timeframe, usually within a couple of business days of receipt.
• After submitting your claim, the GAP provider will reach out to you regarding your claim status.

Note that GAP insurance covers the "upside-down" amount, which is the difference between the value of your vehicle and your loan amount. This amount is the "gap" that GAP insurance is designed to cover.

Frequently asked questions