Gap Coverage


Gap waives the difference between what you owe on your vehicle and what your insurance company will pay*

In the unfortunate event your vehicle is declared a total loss due to an unrecoverable theft or accidental damage, your auto insurance company will typically pay the current market value of your vehicle less your deductible. But what if your loan or lease balance is higher than the market value of your vehicle? Answer: You would be responsible for paying off the difference, including your deductible. This can be expensive.

The reason for the potential difference is that normally the loan/lease balance decreases at a predictable amount as monthly payments are made. However, the market value of your vehicle is influenced by several variable factors (e.g. supply, demand, mileage). This means that market value often may be lower than your outstanding balance – particularly early in your contract when you have the most to lose.

Guaranteed Asset Protection (GAP) can help waive the difference from the current market vale of your vehicle.

*Based on your insurance company paying NADA Retail Value for the vehicle at the time of loss. The amount waived will not include any amount financed in excess of 120%** of the MSRP for new vehicles or 120%** of the NADA average retail value for used vehicles on the date of contract.
**The percentage may vary. See the GAP addendum for specific details.


GAP is an optional form of protection available only at the time you sign your Retail Finance or Lease Contract with the dealership. If you would like to know more about GAP, ask to see the GAP addendum. Besides the limitations listed below, terms and conditions may vary by state.


Is the amount you receive from your insurance company enough to pay off your loan or lease balance if your vehicle is declared a total loss?

Insurance Settlement

Market value of vehicle*
Amount you owe on loan or lease

Difference ($5,500)

In this example, the answer is No!
The difference illustrates what you would still owe your lender without GAP.

The above is an example for illustrative purposes. Your situation will vary as to loan/ lease balance and insurance proceed coverage.


You are responsible for the entire amount of your physical damage insurance deductible. See the GAP addendum for specific details.

GAP coverage is terminated if the Retail Installment Sales Contract is refinanced.

GAP waiver amount does not include insurance settlement deductions for customer retained salvage, unrepaired physical damage, towing, rental or storage.

GAP waiver amount does not include late payments, deferred payments, late charges/interest or interest after the date of loss.

GAP does not refund advance payments or vehicle equity.

GAP waiver amount does not include the refundable portion of any finance additions such as credit insurance or service agreements.

GAP does not apply to any loan obtained from any finance source other than the dealer.

GAP does not provide any insurance coverage for you or the vehicle, such as collision, comprehensive, bodily injury, property damage or liability. You must have or obtain physical damage insurance on your vehicle at the time of purchase in order for GAP to be effective. GAP is not a replacement for primary auto insurance.


If you’re interested or want more information about GAP Coverage Plan in Johnson City, TN, drop by Johnson City Toyota at 3124 Bristol Highway, Johnson City, TN 37601 . We look forward to serving our customers from Kingsport, Bristol and the Tri-Cities area!