Ford Credit: Gap Insurance Included?

Yes, Ford does offer GAP insurance, which covers the difference between the market value of your car and the balance of the loan. This is important because standard auto insurance policies typically cover the depreciated value of a car, which can be significantly less than the amount you owe on the loan. Ford GAP insurance is available for both new and used vehicles, and can be purchased at the time of vehicle purchase. It covers loan amounts up to 150% of the vehicle's value and offers protection for up to 96 months.

Ford GAP insurance covers the difference between the market value of your car and the loan balance

When you buy a new car, it starts to depreciate in value as soon as it leaves the car lot. In fact, most cars lose 20% of their value within the first year. Standard auto insurance policies cover the depreciated value of a car, meaning they pay the current market value of the vehicle at the time of a claim. This can lead to a situation where the amount of the loan exceeds the market value of the vehicle.

GAP insurance is particularly useful if you made a small down payment (less than 20%), financed for 60 months or longer, leased the vehicle, purchased a vehicle that depreciates faster than average, or rolled over negative equity from an old car loan. Ford offers GAP coverage for new and used vehicles for up to 96 months, with coverage of up to $1,000 towards your deductible in certain states.

It's important to note that Ford GAP insurance is only available at the time of vehicle purchase. Additionally, the cost of GAP insurance can vary, so it's recommended to compare prices and coverage before purchasing.

GAP insurance is only available at the time of vehicle purchase

When purchasing a new Ford vehicle, you have the option to add on Guaranteed Asset Protection (GAP) insurance to your plan. This type of insurance is designed to cover the difference between the insurance settlement and the amount owed on the contract in the event that your car is stolen or totaled.

There are several reasons why you may want to consider purchasing GAP insurance when buying a new Ford vehicle. Firstly, if you made a low down payment, have a high loan-to-value, or a long contract length, GAP insurance can provide valuable protection. Additionally, if you live in a state where Ford GAP insurance covers your insurance deductible up to $1,000, this can be a worthwhile investment. Furthermore, GAP insurance can provide peace of mind and protect you from unexpected expenses, which can be especially useful if you drive a lot of miles or plan to own the car for a long time.

It's important to note that GAP insurance is not required and there are alternative ways to obtain similar coverage. For example, you can add GAP insurance to your existing car insurance policy, or you can purchase it from a dealership or auto lender when you buy the vehicle. However, adding it to your car insurance policy is usually the cheapest option, and it's important to compare the cost of GAP insurance from Ford with the cost from traditional insurers.

Ford offers two types of GAP coverage: GAPCoverage and GAPAdvantage

GAPCoverage

GAPCoverage is available for personal-use vehicles (up to 12,500 lbs. GVWR) with financing up to $125,000. It covers up to $1,000 towards your deductible (except in Alaska) and is valid for up to 96 months. It is also fully refundable within 60 days.

GAPAdvantage

GAPAdvantage includes all the features of GAPCoverage but with the added benefit of a $1,000 credit towards the cost of a replacement vehicle from your originating Lincoln Retailer.

Exclusions

Both GAPCoverage and GAPAdvantage do not cover loss or damage that occurs due to fraud or intentional damage by the customer, outside the US or Canada, after the redemption period following a repossession, or due to legal confiscation by a public official. They also do not cover licensed vehicles registered/titled in a business name or used for business, or vehicles with a salvage title.

GAP insurance may cover your insurance deductible up to $1,000

If your Ford vehicle is stolen or declared a total loss, Ford's GAP coverage offers protection for the gap between your insurance payoff and finance balance. This includes up to $1,000 toward your deductible (except in Alaska).

GAP insurance, or Guaranteed Asset Protection, is an optional add-on product that you can purchase to protect yourself from unexpected expenses. It is designed to cover all or a portion of the difference between the insurance settlement and the amount owed on the contract. This type of insurance is especially useful if you have a low down payment, a high loan-to-value ratio, or a long contract term.

Ford offers two types of GAP coverage: GAPCoverage and GAPAdvantage. GAPAdvantage includes all the features of GAPCoverage, plus an additional $1,000 toward the cost of a replacement vehicle from your local dealer.

It's important to note that GAP insurance is not available in all states and may have different limitations and exclusions depending on your location. Additionally, GAP insurance purchased through a car dealership is typically more expensive than buying it from a car insurance company.

Overall, GAP insurance can provide valuable protection and peace of mind for Ford vehicle owners, especially in the event of a total loss or theft.

GAP insurance is recommended if you applied less than a 20% down payment

GAP Insurance: What You Need to Know

GAP insurance, or "guaranteed auto protection", is an optional form of financial protection that covers the difference between the depreciated value of a car and the loan amount owed in the event of an accident or theft. This type of insurance is particularly useful if you made a low down payment (less than 20%) and chose a long payoff period, as you may owe more than the car's current value.

When you finance or lease a vehicle, depreciation can create a gap between what you owe and the car's value. For example, if you owe $25,000 on a loan for a car worth only $20,000, GAP insurance covers the $5,000 difference, minus your deductible.

GAP insurance is especially recommended if:

• You made a lower down payment (less than 20%) on your new car.
• You have a longer financing term for your vehicle.
• You want protection against depreciation, especially if your car depreciates faster than average.
• You have a loan rollover, where you owe more on your loan than your car is worth at renewal.

Ford's GAP Insurance Offerings

Ford offers GAP insurance, known as GAPCoverage, for both new and used vehicles for up to 96 months. This protection covers the gap between your insurance payoff and finance balance if your Ford is stolen or declared a total loss. Ford also offers GAPAdvantage, which includes all the features of GAPCoverage, plus $1,000 toward the cost of a replacement vehicle from a local dealer.

Where Else Can You Get GAP Insurance?

You can typically purchase GAP insurance from car insurance companies, banks, and credit unions. It is often offered as an optional add-on to your existing car insurance policy or when purchasing or leasing a new car. While it may be convenient to buy GAP insurance from a car dealership, it tends to be more expensive than purchasing it through a car insurance company.

Cost of GAP Insurance

The cost of GAP insurance varies, but it is generally much cheaper to purchase through a car insurance company than a dealership. On average, GAP insurance costs around $61 per year when bought through an insurer, compared to $400 to $700 upfront when bought from a dealership.

Final Thoughts

GAP insurance can provide valuable financial protection if you find yourself owing more on your car loan than your car is worth. However, it is not required and may not be necessary if you made a substantial down payment or can afford to cover the difference between your loan and your car's value.

Frequently asked questions