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

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

In Saskatchewan, GAP (Guaranteed Asset Protection) insurance is an optional financial product specifically designed to cover the 'gap' between your vehicle's actual cash value (ACV), as determined and paid by SGI or your private auto insurer after a total loss (theft or write-off), and the outstanding balance of your car loan. This coverage is particularly relevant in the current Canadian market, including Saskatchewan, where rising vehicle prices, longer loan terms, and minimal down payments mean that new vehicles often depreciate faster than the loan balance is paid down. Without GAP insurance, you could be left owing thousands of dollars on a vehicle you no longer own, creating a significant financial burden and potentially impacting your credit rating when you need to finance a replacement. While SGI and other insurers offer replacement-value endorsements, such as SGI's New Vehicle Replacement coverage, these have specific eligibility criteria and may differ in scope from a dedicated GAP policy. It is crucial for consumers in Saskatchewan to carefully compare the terms, costs, and benefits of both GAP insurance and any replacement-value options available through their primary auto insurance to ensure comprehensive financial protection against vehicle depreciation and loan shortfall.

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