Guaranteed Auto Protection (GAP) plans may be offered to you when you buy a new car. GAP protection covers the difference between what your insurance pays if your vehicle is totaled and  the damage to your vehicle exceeds the actual cash value (ACV), and the amount you still owe the lender at that point.  

If you're told you must purchase a GAP plan to qualify for financing, the cost of the GAP program must be included in the finance charge and reflected in the disclosed annual percentage rate. Only if the plan is optional can it be excluded from the charge and annual percentage rate.

TIP: Ask your dealer what “gap” will exist the day you take delivery of your car. If that is an amount you can pay with other resources, you should consider whether the GAP coverage is a good idea for you. Remember, any add-on product costs you not just the upfront cost but also the interest of paying for this product over the life of the loan.