GAP Insurance (Waiver)
Definition
Protection that covers the difference between the insurance payout and the remaining loan balance if a vehicle is totaled.
Why It Matters
GAP protects customers from owing thousands of dollars on a totaled vehicle. It's one of the easiest F&I products to present because the value is clear and the cost is low relative to the protection.
Examples
- If a customer owes $30,000 but insurance pays $25,000, GAP covers the $5,000 difference
- Elite F&I managers achieve 80%+ GAP penetration on financed vehicles
Related Terms
VSC (Vehicle Service Contract)
An agreement that covers mechanical and electrical breakdowns beyond the manufacturer's warranty.
Penetration Rate
The percentage of customers who purchase a specific F&I product out of total retail units sold.
PRU (Products Per Retail Unit)
The average number of F&I products sold per vehicle, calculated by dividing total products sold by total retail units delivered. A PRU of 2.0 means you are selling an average of 2 products per car.