Guaranteed Asset Protection (GAP) insurance is an optional financial safeguard designed for Canadian car buyers and lessees. It specifically covers the monetary "gap" that arises when your vehicle is declared a total loss - due to theft or an accident - and your primary auto insurer's payout (based on the car's actual cash value) is less than the outstanding balance on your loan or lease agreement. In the Canadian market, particularly with new vehicles and longer financing terms common in 2025, rapid depreciation often means a car's market value quickly falls below the amount still owed. Without GAP coverage, you would be personally liable for this shortfall, potentially thousands of dollars, leaving you to pay for a vehicle you no longer own and hindering your ability to secure new financing. This coverage provides crucial peace of mind, protecting you from a significant out-of-pocket expense and ensuring you aren't left with a substantial debt after an unforeseen total loss event.