What Insurance Providers Have Gap Insurance?

Guaranteed Asset Protection (GAP) insurance provides coverage for the financial “gap” that can emerge between a vehicle’s actual cash value (ACV) and the remaining balance on a loan or lease. This coverage becomes relevant if a vehicle is stolen or declared a total loss, since standard auto insurance policies typically only pay out the depreciated value. It prevents a borrower from owing money on a vehicle they can no longer drive.

Insurance Companies

Traditional auto insurance carriers often offer GAP insurance as an optional addition to existing comprehensive and collision policies. To qualify, vehicles typically need to be new or nearly new, with specific requirements varying by provider, such as being the original loan or leaseholder. Insurers often require the vehicle to be no older than a certain model year, commonly two or three years. Contacting your current auto insurance provider for eligibility and a quote is recommended, as adding GAP coverage to an existing policy is often cost-effective. This is primarily because the premium is usually added to the annual insurance premium and does not incur interest charges.

Automobile Dealerships

Automobile dealerships often present GAP insurance as part of the vehicle purchase or lease transaction. This option is typically introduced during the financing discussion, offering a convenient way to secure coverage at the point of sale. The cost of GAP coverage acquired through a dealership is often rolled into the vehicle’s financing agreement, meaning the buyer may pay interest on the premium over the loan term. While convenient, this can sometimes make the coverage more expensive than if obtained elsewhere. Buyers can decline GAP insurance offered by a dealership, even if initially included in proposed financing terms.

Financial Institutions

Banks, credit unions, and other auto lenders also serve as providers of GAP coverage. These financial institutions typically offer this protection directly to borrowers when a new or used vehicle loan is originated. The cost of GAP coverage from a financial institution can be integrated into the vehicle loan or offered as a separate, one-time payment. Some lenders may structure this protection as a “gap waiver” within the loan or lease agreement, functioning similarly to traditional GAP insurance. Borrowers financing a vehicle should inquire with their chosen bank or credit union about available GAP coverage options.