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

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

In Yukon, GAP (Guaranteed Asset Protection) insurance is an optional financial product designed to cover the critical difference between your vehicle's actual cash value (ACV) at the time of a total loss (due to theft or write-off) and the outstanding balance of your car loan. Given rapid vehicle depreciation, especially with low down payments or longer financing terms common in the 2025 Canadian market, it's easy for a car's loan balance to exceed its market value. Without GAP coverage, you could be left owing thousands on a vehicle you no longer possess, potentially harming your credit rating and financial stability. While not provincially mandated in YT, it offers crucial financial protection by ensuring your loan is fully settled, preventing a significant out-of-pocket expense. It's important to differentiate GAP from replacement-value auto insurance, which typically covers the cost to replace your vehicle with a new one; GAP specifically targets the loan shortfall. Always compare the specifics of both your primary auto insurance and any GAP offerings to determine if this additional layer of protection is necessary for your individual circumstances.

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