What are the underwriting rules for GAP insurance?
Generally, the following rules apply: Maximum APR of the auto loan 12.5% However, this doesn’t necessarily mean you can’t get GAP insurance. What this usually means is the insurance company will pay out based on a maximum 12.5% APR. If your auto loan was written at 21% for example, you would still be responsible for the difference in interest. As always, check with the issuer to determine the exact terms. Maximum term 84 months for auto loans; 60 months for auto leases/balloon loans. This should not be an issue in most cases, since most loans do not go beyond the 60 month range.
