Dealerships can once again offer Guaranteed Asset Protection (GAP) to service members and their families. The U.S. Department of Defense has granted a joint petition to withdraw Question and Answer (Q&A) 2 from a December 2017 Interpretive Rule that sought to define the scope of the vehicle and personal property financing exclusion to the Military Lending Act (MLA).
The petition was filed by RVDA, NADA and the American Financial Services Association. The issue is also a top priority for the Voluntary Protection Products Coalition, which includes RVDA.
The associations explained that Q&A 2 interpreted the MLA in a way that prevented dealers from making GAP waiver coverage available to service members. Previously, service members were able to voluntarily purchase GAP coverage to protect against the risk of a partial or total loss.
Motor vehicle and financial services trade groups argued this interpretation exposed service members to significant liability. Under the previous ruling, service members were unable to adequately protect themselves from incurring financial losses.
The RVDA will provide updated information regarding this issue as details become available.