Westlake Financial: Gap Insurance Coverage

Westlake Financial offers Guaranteed Auto Protection (GAP) insurance through its affiliate Knight Management Insurance Services (KMIS). This insurance covers the difference between the amount a customer’s comprehensive insurer pays and the amount owed to the customer’s finance company in the event of a total loss accident or theft. A one-time premium covers the duration of the finance contract, and dealers who sell the KMIS GAP product on Westlake deals will receive at least 25% back. While GAP insurance is not mentioned in all Westlake Financial reviews, one customer mentions purchasing GAP coverage and then having issues with their claim.

What is GAP insurance?

GAP insurance stands for Guaranteed Asset Protection insurance. It is an optional, additional coverage that can help certain drivers cover the difference between the financed amount owed on their car and the car's actual cash value (ACV) in the event of a covered incident where their car is declared a total loss.

When you buy or lease a new car, the vehicle starts to depreciate in value the moment it leaves the car lot. Most cars lose 20% of their value within a year. Standard auto insurance policies cover the depreciated value of a car, meaning a standard policy pays the current market value of the vehicle at the time of a claim. In the event of an accident in which your car is badly damaged or totaled, gap insurance covers the difference between what a vehicle is currently worth (which your standard insurance will pay) and the amount you actually owe on it.

For example, if you owe $25,000 on your loan and your car is only worth $20,000, your gap coverage covers the $5,000 gap, minus your deductible.

Gap insurance is typically only available for brand-new vehicles or for models that are less than three years old. It is also a good option for drivers who owe more on their car loan than the car is worth.

What does GAP insurance cover?

Guaranteed Asset Protection (GAP) insurance, also known as Guaranteed Auto Protection, is an optional product that covers the difference between the amount owed on an auto loan and the amount the insurance company pays if the car is stolen or totaled. This type of insurance is intended for people who finance or lease their vehicles.

GAP insurance covers the gap between a vehicle's actual cash value and the outstanding balance on a loan or lease. It is designed to protect against financial loss in the event of a total loss from an accident or similar misfortune. The cost of GAP insurance can vary and is often rolled into the loan amount.

It's important to note that GAP insurance does not cover costs related to vehicle repairs, personal injuries, or other accident-related expenses. It only covers the remaining balance on the auto loan if the car is stolen or totaled and is worth less than what is owed.

Westlake Financial offers GAP insurance through their affiliate Knight Management Insurance Services (KMIS). KMIS GAP Insurance covers the difference between the amount paid by the comprehensive insurer and the amount owed to the finance company in the event of a total loss or theft.

Who provides GAP insurance for Westlake Financial?

Guaranteed Auto Protection (GAP) insurance for Westlake Financial is provided by their affiliate Knight Management Insurance Services (KMIS). KMIS Gap Insurance covers the difference between the amount a customer’s comprehensive insurer pays out and the amount owed to the customer’s finance company in the event of a total loss accident or theft. This is particularly useful for those who have leased a car, as it can provide peace of mind and protect against financial risk.

GAP insurance can be added to an existing auto policy or purchased separately. It is worth noting that restrictions on GAP availability may vary by state, and it is recommended that individuals consult an insurance agent to determine the necessary coverage amount.

Westlake Financial offers a one-time premium that covers the duration of the finance contract at an affordable price point. Dealers who sell the KMIS GAP product on Westlake deals will receive at least 25% back.

Is GAP insurance mandatory for a leased car?

GAP insurance is not mandatory for a leased car. However, it is an important form of protection for your finances should your leased car be written off or stolen.

GAP insurance stands for Guaranteed Asset Protection insurance. It covers the 'gap' between what your car insurer pays out and the actual value of your car in the event of a write-off.

When you lease a car, you don't own it. However, you are responsible for insuring it with a fully comprehensive insurance policy. If your leased car is written off or stolen, your insurer will pay out its current market value. GAP insurance covers the difference between this pay-out and the cost of a brand-new replacement or the remaining payments on your lease.

Cars depreciate in value very quickly. A new car can lose up to 40% of its value in its first year. If your leased car is written off or stolen, GAP insurance can protect you from having to pay out of pocket for the remaining lease payments or to replace the car.

GAP insurance is not necessary if you would be happy with a replacement car that is not brand new. If your car is less than a year old and you have fully comprehensive insurance, your insurer may cover the cost of a new car. GAP insurance is also unnecessary if you have a very old car, as it will depreciate much more slowly.

How much GAP insurance is needed?

The amount of GAP insurance you need depends on several factors. GAP insurance is designed to cover the difference between what your auto insurance covers and what you owe at the time of a total loss. This gap between the value of the car and what you may owe is determined by variables such as the depreciation of the car, the number of payments made, and the nature of the deal you negotiated. As these variables change over time, the amount of GAP insurance you need can also change.

To obtain adequate coverage, you should contact your insurance agent and work with them to determine the necessary coverage amount. You can also use resources like Kelley Blue Book to estimate your car's value and review your loan terms to check how much you will still owe in payments. By comparing these values, you can calculate the amount of GAP insurance coverage you may need.

In general, GAP insurance is most beneficial for new car buyers when the vehicle is less than three model years old. It is also worth considering if you made a small down payment, have a long finance period, or purchased a vehicle that depreciates quickly.

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