Developments In Personal Property Finance: Gap Waivers-is A Trend Toward Clarity Beginning?

摘要

GAP Waivers help consumers who finance or lease assets such as motor vehicles mitigate the risk of an asset that often is worth less than is owed on it if it is lost, stolen, or destroyed. To comply with state law, creditors offering GAP Waivers must be concerned with whether a GAP Waiver is considered insurance, meet any disclosure requirements with respect to GAP Waivers, and consider whether the price of a GAP Waiver may be financed. The answers to these questions often have been difficult to determine because of the manner in which states provide guidance. Fortunately, Georgia and Tennessee have adopted comprehensive statutes clarifying the treatment of GAP Waivers that promise to make compliance much easier in these states and may signal a trend toward developing clarity in other states.