GAP and Depreciation Protection – Better Together

Apr 24, 2019

GAP and Depreciation Protection – Better Together

Even if you’ve never totaled a car, it’s easy to imagine how stressful that experience would be. Not only do you have to figure out how you’ll get where you need to go every day, odds are you’ll still owe a balance on a vehicle you no longer own. That balance doesn’t just go away—it must be paid somehow. And what about cash for a new down payment? Well, you’ll have to come up with that all over again, too. Fortunately, there are specialized F&I products that can help ease the burden of a total loss: GAP and Depreciation Protection products.

While GAP has been a mainstay in the F&I office for decades, Depreciation products are relatively new on the scene. Each offers a different type of benefit, with GAP assisting in paying off a customer’s remaining loan balance and Depreciation Protection providing down payment assistance for their replacement vehicle purchase. Even on their own, these two products are excellent investments for many buyers, but together they pack a serious financial punch.

Better Together

Average new vehicle prices have soared in recent years, and loan balances have been right behind them. Customers don’t just have big balances on the vehicle they’re buying; many of them have rolled debt from their last vehicle into their new loan balance. That negative equity currently averages over $3,000. If the customer totals their new vehicle, they may not realize that their insurance company will only cover the value of their vehicle, not the entire outstanding loan balance. GAP is valuable for any customer who is “underwater” on their newly-purchased vehicle, but it’s especially helpful for those buyers who carried negative equity into their new auto loan.

Amid the jaw-dropping average transaction prices and loan balances, there is a positive statistic: down payments are rising alongside those other factors. This is good news! Customers who put more money down are setting themselves up with a better equity position on their new vehicle, whether they end up trading it in down the line, totaling it, or just driving it until it falls apart. However, if they do experience a total loss, they’re effectively “out” their down payment; with down payments climbing alongside prices, more buyers will face a hefty financial write-off even if they have GAP. This is where increasingly-popular Depreciation Protection products come in: they provide a new down payment, paid directly to the dealership. The powerful value of GAP and Depreciation Protection together helps minimize the risk to a buyer’s financial security after a total loss. To put it simply: GAP can make the customer “even,” but GAP and Depreciation Protection together can make them whole.

While the standalone benefits of GAP and Depreciation products are clear, when offered as a package they’re an F&I product “dream team.” GAP protects consumers from a remaining loan balance, and Depreciation Protection protects their original down payment. Working together, GAP and Depreciation products help relieve the financial strain of a total loss while building customer loyalty for the selling dealer.

NAC’s PowerBuy is the premier Depreciation Protection product in the market today. Curious about what Depreciation products can do for your F&I profits? Contact your NAC Sales Rep for more details!

For additional information, articles or interviews please contact:
Alexi Gonzalez at


National Auto Care Corp. provides F&I products, administration, consulting services, training and marketing support to independent agents, insurance companies, financial institutions, third-party administrators, and credit unions. National Auto Care Corp. focuses on increasing agent and dealer profitability by providing unique F&I products in protected markets.


National Auto Care is a multi-year award winner for Top Workplace and F&I Product Provider Excellence.

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