Did you know that most total losses on Powersports vehicles like ATV’s and UTV’s occur within the first six months of ownership? When this happens, the owner is left paying for a vehicle they are no longer able to use. This is where Powersports GAP Protection and Powersports Total Loss Protection come into play. Because in truth, vehicle loans don’t get written off just because the vehicle was totaled or stolen.

Powersports GAP Protection and Powersports Total Loss Protection are two different types of insurance coverage, but with the same goal in mind: to protect the consumer from financial burdens. How does each one work, exactly? Here are a few key things to know about them:

1. They are “activated” when the covered vehicle has been declared a total loss

Vehicle loss usually occurs in one of two ways: a road accident resulting in a complete wreck, or theft. In either case, the vehicle owner will be left with no vehicle to use. With a Powersports vehicle, this could mean an ATV, UTV, or a motorcycle. Total loss is one of the most common financial burdens that vehicle owners deal with unexpectedly. To ease their financial burden, F&I companies like the Torque Group provide solutions like Powersports GAP Protection and Powersports Total Loss Protection to dealerships to extend these to their customers.

2. GAP Protection covers the difference between the loan balance and ACV

Guaranteed Asset Protection or GAP will shoulder the difference between the loan balance and the Actual Cash Value (ACV) of the vehicle. This type of insurance coverage not only helps protect the policyholder from financial losses but more importantly, it protects their credit and good name as they will not be delinquent with loan payments.

Not all GAP insurance is the same, however, because not all have the best interests of the dealership AND the customer in mind. As a dealership, you have to double-check that both you and your customers are protected against financial losses.

3. Powersports Total Loss Protection helps pay for a new vehicle

Where GAP insurance covers the loan, Total Loss Protection or TLP covers a new vehicle purchase. Vehicle owners could get up to $5,000 in cash assistance when they purchase a replacement vehicle. Again, the amount to be covered depends on the provider. With Torque Group, for instance, their TLP insurance covers the following: up to $5,000 cash assistance for the purchase of a replacement vehicle, and up to four years of protection, among others.