That gap between what your insurance pays and what you actually owe has a name: GAP. And at most dealerships, if you want coverage for it, you're paying extra for it — sometimes a lot extra, tacked on at the finance desk as an add-on you didn't know to ask about.
At Holmes Motors, GAP coverage comes free with every vehicle, for the life of the loan. Here's why that matters, and why we don't treat it as a place to make an extra dollar.
What GAP Coverage Actually Does
When you finance a car, you owe more than the car is worth for a good chunk of that loan. Cars depreciate the moment you drive them off the lot, and your loan balance doesn't drop nearly as fast as the car's value does — especially early on.
So if your car is totaled or stolen in year one or two, your insurance company only pays out the car's current market value. If you still owe more than that, you're personally on the hook for the difference. That could be a few thousand dollars — money you'd be paying every month for a car you no longer have.
GAP coverage closes that gap. It covers the difference so you're not stuck paying off a car that's already gone.
Why Most Places Charge for It
For a lot of dealers, GAP coverage is treated like any other add-on: an upsell. It gets bundled with extended warranties and other extras at the finance desk, often with a price tag that isn't always clearly explained. Some buyers don't even realize they don't have it until they need it — and by then, it's too late to add.
We don't think protection that matters this much should be something you have to know to ask for, let alone pay extra for.
Why We Include It Free
A car accident or theft is stressful enough without adding a surprise bill on top of it. We'd rather you drive off the lot already protected than find out later you weren't.
It's also part of a bigger philosophy we have about how we do business. Along with GAP coverage, we include a free service agreement, a 4.5% interest rate, and a no-penalty turn-in option if your situation changes. None of these are things we make you negotiate for or upgrade into. They're just part of what you get when you buy from us.
The Bottom Line
Nobody plans for their car to get totaled. That's exactly why GAP coverage matters — it's protection for the moment you didn't see coming. We'd rather build that protection into every deal from day one than sell it to you as an afterthought.
If you have questions about how GAP coverage works or want to know more about what's included with your vehicle, stop by one of our four locations — D'Iberville, Douglasville, Birmingham, or Montgomery. We're happy to walk you through it.