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Dealers find new uses for GAP insurance

November 23, 2010
Once used mainly in lease deals, GAP insurance increas-  ingly is offered with traditional car loans. Sales of GAP policies through GMAC Insurance have been doubling each year and are on pace to exceed 60,000 contracts annually. The insurance guarantees the difference between a vehicle's current value and the customer's loan balance if the car is totaled or stolen. Sales of the policies are becoming an important profit center for dealers and specialty insurers. The premiums range from about $350 to $550. GMAC, Ford Credit, and other captive finance firms offer GAP policies through their dealers, with premiums typically capped at about $500.