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Did you get a refund on your unused GAP?

What is GAP Coverage?

GAP, or “Guaranteed Auto Protection,” is a type of coverage offered to the consumer when financing an auto loan. For a fee, the lender agrees that in the event the vehicle is stolen or damaged beyond repair, the lender will waive any “gap” between the amount still owed on the loan and the amount paid by the consumer’s auto insurance for the loss of the vehicle. That way consumers aren’t left with car loan payments on a vehicle they no longer have.

What is a GAP agreement?

GAP is offered by the dealership at the time the vehicle is financed. When a car buyer purchases GAP, a contract is signed by the buyer and the dealer to add GAP to the auto loan. The GAP obligations are then assigned to the lender who purchases the loan from the dealer.

When are borrowers entitled to a GAP refund?

The GAP fee is paid up front, generally by adding it to the amount of the loan.


But in certain situations, a consumer may want to cancel GAP coverage, either because the car loan was paid off early or terminated for other reasons. Because the GAP fee is pre-paid, the lender is contractually and legally required to refund the unused portion of the GAP fee on pro-rated basis. For example, if you paid $800 for GAP coverage but then pay off the balance of your loan 18 months into a 36-month loan, you are entitled to a $400 refund.


If you purchased GAP coverage, then terminated your loan early or canceled the GAP, then you should have been refunded a portion of what you paid. If you didn’t receive a refund, you may have a claim against your lender.

What Auto Lenders are being investigated?

  • Honda
  • GMF Americredit
  • Capital One
  • Bank of America
  • Huntington
  • Chase
  • Chrysler Capital
  • Kia Motor Finco
  • Toyota
  • TD Auto
  • PNC Bank
  • Ford
  • Credit Acceptance
  • US Bank
  • Nissan Infiniti
  • Carmax
  • Santander

What if my lender isn’t listed?

If your lender isn’t listed, but you purchased GAP and believe you are owed a refund from your lender, there is always the potential for new cases as we receive more information and investigate. Please contact us for a free consultation with one of our knowledgeable attorneys.

How can I fight back?

Pursuing individual claims for GAP refunds can cost more than most consumers could ever expect to recover. But individuals owed money by their lenders can band together in class action lawsuits, seeking recovery of GAP fees owed to them and changes in the way their lenders do business. A class action lawsuit gives more people access to the legal system for relief, saves on costs and court time, and allows individuals to combine their claims to make their case stronger.

Do I have a case?

The best way to determine if you have a potential case is to discuss your situation with a knowledgeable attorney. Our attorneys can review your Auto Finance Agreement, GAP Agreement, and the termination of your car loan, and advise you how to proceed.


Franklin D. Azar & Associates is well known in the class action community. For over 30 years, our attorneys have protected the rights of individuals who have been taken advantage of by big corporations, and during that time, have secured over $1.5 billion in compensation – including over $750 million from Walmart in a wage and hour dispute that spanned approximately 26 states. FDAzar has been and is involved class actions against other large corporations like Hewlett Packard, Edward D. Jones & Co., L.P., Flex Ltd., and 401k providers. Notably, FDAzar is litigating a nationwide class action lawsuit against Wells Fargo related to its alleged failure to provide its customers with refunds for GAP. Our class action department is staffed with experienced and knowledgeable attorneys who focus on litigating large, complex cases on behalf of consumers, employees and investors who have suffered losses.


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