INDEMNIFICATION AGREEMENT

Exhibit 10.2

EXECUTION COPY

INDEMNIFICATION AGREEMENT

among

FINANCIAL SECURITY ASSURANCE INC.,

AFS FUNDING TRUST

and

DEUTSCHE BANK SECURITIES INC.

Dated as of August 17, 2005

$182,000,000 Class A-1 3.8445% Asset Backed Notes, Series 2005-C-F

$271,000,000 Class A-2 4.31% Asset Backed Notes, Series 2005-C-F

$356,000,000 Class A-3 4.47% Asset Backed Notes, Series 2005-C-F

$291,000,000 Class A-4 4.63% Asset Backed Notes, Series 2005-C-F

TABLE OF CONTENTS

EXHIBIT A — Opinion of Assistant General Counsel

INDEMNIFICATION AGREEMENT

INDEMNIFICATION AGREEMENT dated as of August 17, 2005, among FINANCIAL SECURITY ASSURANCE INC. (“ Financial Security ”), AFS FUNDING TRUST, (the “ Seller ”) and DEUTSCHE BANK SECURITIES INC., as the Representative (as defined below):

Section 1. Definitions . For purposes of this Agreement, the following terms shall have the meanings provided below:

“ Agreement ” means this Indemnification Agreement, as amended from time to time.

“ Closing Date ” means August 30, 2005.

“ Federal Securities Laws ” means the Securities Act, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940 and the Public Utility Holding Company Act of 1935, each as amended from time to time, and the rules and regulations in effect from time to time under such Acts.

“ Financial Security Agreements ” means this Agreement, the Spread Account Agreement, the Spread Account Agreement Supplement and the Insurance Agreement.

“ Financial Security Information ” has the meaning provided in Section 2(g) hereof.

“ Financial Security Party ” means any of Financial Security, its parent, subsidiaries and affiliates, and any shareholder, director, officer, employee, agent or “controlling person” (as such term is used in the Securities Act) of any of the foregoing.

“ Indemnified Party ” means any party entitled to any indemnification pursuant to Section 4 hereof.

“ Indemnifying Party ” means any party required to provide indemnification pursuant to Section 4 hereof.

“ Insurance Agreement ” means the Insurance and Indemnity Agreement, dated as of August 17, 2005 among Financial Security, the Trust, AmeriCredit Financial Services, Inc., AmeriCredit Corp. and AFS Funding Trust.

“ Losses ” means (a) any actual out-of-pocket damages incurred by the party entitled to indemnification or contribution hereunder, (b) any actual out-of-pocket costs or expenses incurred by such party, including reasonable fees or expenses of its counsel and other expenses incurred in connection with investigating or defending any claim, action or other proceeding which entitle such party to be indemnified hereunder (subject to the limitations set forth in Section 5 hereof), to the extent not paid, satisfied or reimbursed from funds provided by any other Person other than an affiliate of such party (provided that the foregoing shall not create or imply any obligation to pursue recourse against any such other Person), plus (c) interest on the amount paid by the party entitled to indemnification or contribution from the date of such

payment to the date of payment by the party who is obligated to indemnify or contribute hereunder at the statutory rate applicable to judgments for breach of contract.

“ Offering Document ” means the Prospectus and any other material or documents delivered by the Underwriters to any Person in connection with the offer or sale of the Securities.

“ Person ” means any individual, partnership, joint venture, corporation, trust, unincorporated organization or other organization or entity (whether governmental or private).

“ Policy ” means the financial guaranty insurance policy delivered by Financial Security with respect to the Securities.

“ Prospectus ” means, collectively, the Prospectus relating to the Securities dated January 7, 2005 and the Prospectus Supplement dated August 15, 2005 (the “Prospectus Supplement”) relating to the Securities.

“ Representative ” means Deutsche Bank Securities Inc., as representative of the Underwriters.

“ Securities ” means the Trust’s $182,000,000 Class A-1 3.8445% Asset Backed Notes, $271,000,000 Class A-2 4.31% Asset Backed Notes, $356,000,000 Class A-3 4.47% Asset Backed Notes and $291,000,000 Class A-4 4.63% Asset Backed Notes issued pursuant to the Series 2005-C-F Indenture.

“ Securities Act ” means the Securities Act of 1933, as amended from time to time.

“ Seller Party ” means any of the Seller, its parent, subsidiaries and affiliates and any employee, agent or “controlling person” (as such term is used in the Securities Act) of any of the foregoing.

“ Spread Account Agreement ” means the Spread Account Agreement, as amended and restated, dated as of May 11, 1998, and as further amended as of September 10, 2003, among Financial Security, AFS Funding Trust, the collateral agent named therein and the trustees specified therein, as the same may be amended, supplemented or otherwise modified in accordance with the terms thereof.

“ Spread Account Agreement Supplement ” means the Series 2005-C-F Supplement to Spread Account Agreement, dated as of August 17, 2005, among Financial Security, AFS Funding Trust, the collateral agent named therein and the trustees specified therein.

“ Trust ” means AmeriCredit Automobile Receivables Trust 2005-C-F.

“ Underwriter Information ” has the meaning provided in Section 3(c) hereof.

“ Underwriter Party ” means any of the Underwriters, its respective parent, subsidiaries and affiliates and any shareholder, director, officer, employee, agent or “controlling person” (as such item is used in the Securities Act) of any of the foregoing.

2

“ Underwriters ” means Deutsche Bank Securities Inc., Wachovia Capital Markets LLC, JPMorgan Securities Inc., Lehman Brothers Inc., Morgan Stanley & Co. Incorporated and UBS Securities LLC, as underwriters.

“ Underwriting Agreement ” means the Underwriting Agreement, dated as of August 15, 2005 among the Seller, AmeriCredit Financial Services, Inc. and the Representative.

Section 2. Representations, Warranties and Agreements of Financial Security . Financial Security represents, warrants and agrees as follows:

(a) Organization, Etc . Financial Security is a stock insurance company duly organized, validly existing and authorized to transact financial guaranty insurance business under the laws of the State of New York.

(b) Authorization, Etc . The Policy and the Financial Security Agreements have been duly authorized, executed and delivered by Financial Security.

(c) Validity, Etc . The Policy and the Financial Security Agreements constitute valid and binding obligations of Financial Security, enforceable against Financial Security in accordance with their terms, subject, as to the enforcement of remedies, to bankruptcy, insolvency, reorganization, rehabilitation, moratorium and other similar laws affecting the enforceability of creditors’ rights generally applicable in the event of the bankruptcy or insolvency of Financial Security and to the application of general principles of equity and subject, in the case of this Agreement, to principles of public policy limiting the right to enforce the indemnification provisions contained herein.

(d) Exemption From Registration . The Policy is exempt from registration under the Securities Act.

(e) No Conflicts . Neither the execution or delivery by Financial Security of the Policy or the Financial Security Agreements, nor the performance by Financial Security of its obligations thereunder, will conflict with any provision of the certificate of incorporation or the bylaws of Financial Security nor result in a breach of, or constitute a default under, any material agreement or other instrument to which Financial Security is a party or by which any of its property is bound nor violate any judgment, order or decree applicable to Financial Security of any governmental or regulatory body, administrative agency, court or arbitrator having jurisdiction over Financial Security (except that, in the published opinion of the Securities and Exchange Commission, the indemnification provisions of this Agreement, insofar as they relate to indemnification for liabilities arising under the Securities Act, are against public policy as expressed in the Securities Act and are therefore unenforceable).

(f) Financial Information . The consolidated balance sheets of Financial Security as of December 31, 2004 and December 31, 2003 and the related consolidated statements of income, changes in shareholder’s equity and cash flows for each of the three years in the period ended December 31, 2004, and the interim consolidated balance sheets of Financial Security as of March 31, 2005 (and March 31, 2004) and June 30, 2005 (and June 30, 2004) (unaudited), and the related statements of income, changes in shareholder

3

equity and cash flows for the interim period then ended, which are incorporated by reference in the Prospectus, fairly present in all material respects the financial condition of Financial Security as of such dates and for such periods in accordance with generally accepted accounting principles consistently applied (subject as to interim statements to normal year-end adjustments) and since the date of the most current interim consolidated balance sheet referred to above there has been no change in the financial condition of Financial Security which would materially and adversely affect its ability to perform its obligations under the Policy.

(g) Financial Security Information . The information in the Prospectus Supplement set forth or incorporated by reference under the caption “The Insurer” (as revised from time to time in accordance with the provisions hereof, the “ Financial Security Information ”) is limited and does not purport to provide the scope of disclosure required to be included in a prospectus with respect to a registrant in connection with the offer and sale of securities of such registrant registered under the Securities Act. Within such limited scope of disclosure, however, as of the date of the Prospectus Supplement and as of the Closing Date, the Financial Security Information does not contain any untrue statement of a material fact, or omit to state a material fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading.

(h) Additional Information . Financial Security will furnish to the Underwriters or the Seller, upon request of the Underwriters or the Seller, as the case may be, copies of Financial Security’s most recent financial statements (annual or interim, as the case may be) which fairly present in all material respects the financial condition of Financial Security as of the dates and for the periods indicated, in accordance with generally accepted accounting principles consistently applied except as noted therein (subject, as to interim statements, to normal year-end adjustments). In addition, if the delivery of a Prospectus relating to the Securities is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Securities, the Seller or the Underwriters will notify Financial Security of such requirement to deliver a Prospectus and Financial Security will promptly provide the Underwriters and the Seller with any revisions to the Financial Security Information that are in the judgment of Financial Security necessary to prepare an amended Prospectus or a supplement to the Prospectus.

(i) Opinion of Counsel . Financial Security will furnish to the Underwriters and the Seller on the closing date for the sale of the Securities an opinion of its Assistant General Counsel, to the effect set forth in Exhibit A attached hereto, dated such closing date and addressed to the Seller and the Underwriters.

(j) Consents and Reports of Independent Accountants . Financial Security will furnish to the Underwriters and the Seller, upon request, as comfort from its independent accountants in respect of its financial condition, (i) at the expense of the Person specified in the Insurance Agreement, a copy of the Prospectus, including either a manually signed consent or a manually signed report of Financial Security’s independent accountants and

4