Dealers began offering GAP (Guaranteed Asset Protection) Products in the early 1980’s in the wake of rising vehicle prices, extended terms on motor vehicle loans and the increasing popularity of leasing. It’s no secret that a vehicle is a depreciating asset and that the value of most new vehicles immediately decreases when they are driven off a dealership’s lot. In addition to the cash price of the vehicle, customers may also finance other costs, such as documentary fees, sales tax and other after market products. If a vehicle happens to be totaled or stolen, a debtor could end up owing thousands of dollars, even after the insurance company pays the insurance claim. In other words, GAP closes the gap between what the insurance company pays and what is owed to the finance company or lessor. The answer as to whether or not GAP is insurance varies depending upon the state where GAP is sold and how it is presented to the customer. The good news is that most states have now addressed whether dealers may sell GAP as an optional product to their retail customers. The bad news is that the answer is not always easy to find in a state’s motor vehicle code and, even in those states that permit the sale of GAP, there are often caveats that may be difficult to understand. Someone who has knowledge about both the products being offered and our industry should always review the GAP program and any related materials. Using past experience in Ohio as an example, there was no statutory language directly on point with respect to this issue. After the issue of whether it was insurance was raised a number of times by plaintiff’s attorneys, the Ohio Department of Insurance issued an opinion that the sale of GAP products by motor vehicle dealers does not constitute the sale of property damage insurance within the meaning of Ohio Law.