Near the end of most car deals, you'll be offered protection products. Some can be useful in the right situation. All of them are optional, and they cost more when they're rolled into a loan you pay interest on.
GAP coverage
If your car is totaled or stolen, your insurance pays what the car is worth, which can be less than what you still owe on the loan. GAP (guaranteed asset protection) covers that difference.
- It can make sense if you put little or nothing down, have a long loan, or rolled negative equity into the loan.
- You only need it while you owe more than the car is worth. That's often just the first year or two.
- Your auto insurer, bank or credit union may offer GAP for less than the dealer. Compare before you sign.
- Read the exclusions. Some policies don't cover negative equity rolled in from a trade, and service members should check whether coverage applies overseas.
Extended warranties (service contracts)
A service contract is a promise to pay for certain repairs after the factory warranty ends. They often cost hundreds or thousands of dollars and commonly exclude wear items like brakes and clutches.
- Check how much factory warranty your car already has. A new car may be covered for years.
- Read exactly what's covered, the deductible, and who handles claims.
- You don't have to decide at the dealership. Many service contracts can be bought later.
The bottom line
Ask for the price of each product separately, and ask what your monthly payment is with and without it. If a product is in the paperwork that you didn't ask for, you can ask for it to be removed before you sign.
Last reviewed October 2026. Fees and rules can change — confirm current amounts with the Bay County Tax Collector or your lender before you buy. This guide is general information, not legal, tax or financial advice.