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In QC, what should I know about GAP insurance for car loans?
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Car Loan Glossary • province

In QC, what should I know about GAP insurance for car loans?

In Quebec, GAP (Guaranteed Asset Protection) insurance is an optional, yet often recommended, product designed to cover the financial shortfall that can arise if your vehicle is declared a total loss (due to theft or irreparable damage) and your primary auto insurance payout is less than the outstanding balance on your car loan. Given typical vehicle depreciation rates, which often outpace loan principal reduction, especially with longer loan terms or current market conditions extending into 2025, a significant 'gap' can emerge. This matters to the consumer because, without GAP coverage, you could be left owing thousands of dollars to your lender for a vehicle you no longer own, creating an unexpected and substantial financial burden. While available from various providers, it's crucial for Quebec consumers to compare GAP insurance offerings with potential alternatives, such as a 'replacement value' or 'new car replacement' endorsement available through their primary auto insurer, to ensure they select the most comprehensive and cost-effective protection for their specific situation, always confirming provincial rules and taxes.

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