Gap (guaranteed asset protection) insurance is more popular than you may think. In fact, it was chosen by consumers in approximately 39% of vehicle financing deals, according to a University of Michigan study. More than nine in 10 of those who purchased gap insurance expressed satisfaction with their decision.
“This type of coverage is typically only available if you are the original loan or leaseholder on a new vehicle, but you may be able to obtain it for certain used vehicles,” says Mark Friedlander, director of corporate communications for the Insurance Information Institute (Triple-I).
Learn how gap insurance works, good candidates for purchasing gap insurance, where to buy gap insurance, who offers gap insurance, how to buy gap insurance online and how to save on gap insurance.
CarInsurance.com Insights
- You can buy gap insurance from auto insurers, dealerships, online providers, banks and credit unions.
- Car insurance companies typically offer the lowest rates for gap insurance.
- In most cases, you’ll pay the most for a gap policy through a dealership.
Where to buy gap insurance: Compare your options
Several sources offer gap coverage, including insurance companies, car dealerships and auto loan lenders. You may also acquire gap coverage from a bank, credit union or specialized provider.
Gap insurance is the cheapest when you purchase it from your insurance company, and you can cancel it anytime. In the table below, see an overview of how these options compare.
| Coverage details | Insurance company | Auto loan lenders/car dealerships | Credit unions | Specialized provider, such as EasyCare or AutoPay |
|---|---|---|---|---|
| Cost range | $20 to $40 per year when you add it onto your existing auto policy | $500 to $700 per year when you finance your vehicle | One-time fee of $550 to $600 | One-time fee of $150 to $300 |
| Cancelability/refund rules | Can cancel at any time and receive a prorated refund | Varies by lender/dealer, but a prorated refund is usually available; some dealers have a 30-day cancellation period in which you can cancel and collect a full refund in 30 days | Can cancel at any time and receive a prorated refund | Can cancel at any time and collect a prorated refund as long as you have specific documentation based on the reason for the cancellation |
Buying gap insurance from your auto insurer
You can start with your auto insurance company as you seek out gap insurance providers. Many major auto insurers, including State Farm, Nationwide, Progressive, Allstate, USAA, AAA and Esurance, offer stand-alone gap insurance or coverage as an add-on to your existing policy, but not all do. You may need to shop around.
“You will reap significant savings by adding gap insurance to your current auto insurance policy versus purchasing separate coverage from a car dealer or financing company,” Friedlander says.
Below is a list of insurance providers that offer gap coverage.
- Allstate
- American Family
- Amica
- Auto Owners
- Chubb
- Erie
- Farmers
- Frankenmuth Insurance
- Mercury Insurance
- Midvale Home & Auto
- Nationwide
- Kemper
- Progressive
- Liberty Mutual
- Safety Insurance
- Sentry Insurance
- Shelter Insurance
- State Farm
- The Hanover
- The Hartford
- Travelers
- USAA
These insurance companies do not offer gap insurance:
- Alfa
- Anchor
- Bristol West
- COUNTRY Financial
- Elephant
- GEICO
- National General
Pros and cons of gap insurance
pros
- Gap insurance through your car insurance provider is usually the most affordable option. It often costs significantly less than buying from a dealer or lender.
- It’s easier to manage. Keeping gap coverage bundled with your standard auto policy means one point of contact for claims and billing.
- It’s flexible and cancelable. You can often remove gap insurance from your policy at any time and receive a prorated refund if coverage is no longer needed (such as when your loan balance drops below your car’s value).
- It’s usually customizable. Many insurers allow you to tailor your policy based on your vehicle’s value and loan balance.
cons
- Gap coverage is not offered by all insurers. Some companies don’t sell it, especially for used cars or older vehicles.
- There may be eligibility requirements. You may need to meet specific criteria, such as being the original owner or having a recent model year.
How to buy gap insurance online
You can buy gap insurance online if you do not already have an auto insurance policy or your current insurer doesn’t offer gap coverage. An online insurance provider can be an effective way to request quotes quickly and find an affordable policy.
“Requesting and comparing multiple quotes from an online site may be the most convenient way to find a policy at the lowest price,” says Laura Adams, a personal finance and insurance expert in Vero Beach, Florida.
Buying gap insurance from the car dealership
The finance department at your auto dealership may offer gap insurance and roll the cost into your loan payments. Since you’ll likely pay a flat fee plus interest on top of it, dealer gap insurance tends to be the most expensive option. Also, your coverage will end once you refinance because you’ll no longer have your loan.
Gap insurance through your lender or credit union
If you’re financing your vehicle through a lender or credit union, they may be able to add gap insurance onto your coverage. However, depending on your financing company, this may not be an option and if it is, you can expect to pay more for a gap policy than if you were to go through a car insurance company.
Stand-alone gap insurance companies
Some companies like EasyCare and AutoPay specialize in standalone gap insurance. You’ll typically pay a flat, one-time fee in exchange for coverage. While you might get a better deal than if you were to go through a dealership or lender, you’ll likely secure a cheaper rate with an auto insurer.
How much does gap insurance cost in 2025?
Below is a list of insurance providers that offer gap coverage:
| Company | Premium with gap insurance | Premium without gap insurance | Cost of gap insurance |
|---|---|---|---|
| Sentry Insurance | $5,980 | $5,956 | $24 |
| Safety Insurance | $1,797 | $1,772 | $25 |
| Iowa Farm Bureau | $2,543 | $2,517 | $26 |
| Mercury Insurance | $3,004 | $2,962 | $41 |
| State Farm | $1,869 | $1,822 | $46 |
| Travelers | $2,026 | $1,977 | $49 |
| Progressive | $2,692 | $2,640 | $53 |
| American Family | $2,056 | $1,998 | $58 |
| Auto-Owners | $1,912 | $1,850 | $62 |
| Nationwide | $2,183 | $2,115 | $69 |
| Mapfre Insurance | $1,493 | $1,424 | $70 |
| The Hanover | $1,831 | $1,760 | $71 |
| Vermont Mutual | $1,424 | $1,353 | $71 |
| Auto Club Group – ACG (AAA) | $1,505 | $1,423 | $82 |
| Auto Club Enterprises (AAA) | $2,483 | $2,394 | $89 |
| Kemper | $2,622 | $2,531 | $91 |
| Frankenmuth Insurance | $1,503 | $1,402 | $101 |
| Shelter Insurance | $2,480 | $2,366 | $114 |
| Allstate | $4,066 | $3,947 | $119 |
| The Hartford | $2,891 | $2,770 | $121 |
| Amica | $3,189 | $3,063 | $127 |
| Farmers | $4,092 | $3,928 | $163 |
| CSAA Insurance (AAA) | $6,302 | $6,134 | $168 |
| Erie Insurance | $1,628 | $1,390 | $238 |
| USAA* | $1,047 | $996 | $51 |
Tips for buying a gap insurance policy
There are a few things to know about buying a gap insurance policy:
1. Compare costs among gap insurance providers carefully.
“Try to get at least three to four quotes from different insurers. You’ll be surprised at the price differences. Sometimes dealers mark up gap insurance by 200 to 300 percent compared to independent providers,” personal finance expert Andrew Lokenauth says. “And don’t forget to check if your regular auto insurance company offers gap coverage – they might give you a sweet discount.”
2. Consider coverage limits, the policy length and cancellation policies.
“Understanding gap insurance policy specifics is critical,” says Steven Kibbel, a certified financial planner. “Some policies cap the maximum payout, which could leave you covering the rest of your loan out of pocket if your car is totaled. Coverage duration is another factor – some policies only cover the first few years of a loan, leaving you vulnerable later. Exclusions and limitations can also be tricky, such as mileage restrictions or specific types of damage that are not covered. Reading the fine print matters here.”
3. Avoid cancellation fees
Dennis Shirshikov, a professor of finance and economics at City University of New York/Queens College, stresses the importance of understanding what happens if you want to cancel the policy.
“Ideally, you want to avoid penalties or fees if you need to terminate the policy prematurely,” he says. “Having extra flexibility in a gap insurance policy allows you to adjust coverage as your circumstances change, such as refinancing your car loan or paying it off early.”
4. Determine if the gap policy will cover your insurance deductible if the vehicle is written off or stolen.
Again, reading the fine print is key.
Where can I buy gap insurance online?
You can buy gap insurance online through a specialized gap provider such as EasyCare or AutoPay. Simply go to their website and complete a quick form to complete the process.
Does GEICO offer gap insurance?
Currently, GEICO does not offer gap insurance.
Can you buy gap insurance at any time?
You can usually purchase gap insurance for a new or used vehicle as long as the loan or lease remains unpaid. However, specific insurers might impose a restricted timeframe within which coverage can be obtained.
Can I buy gap insurance by itself?
Yes, you may be able to buy standalone gap insurance from a specialized provider. EasyCare and AutoPay are two options to explore.
Frequently asked questions
What is a gap insurance waiver?
A gap waiver, also known as a gap addendum, is a supplement you can add to your auto loan or lease that serves as a debt cancellation agreement. This agreement absolves you from paying the difference between what you owe on the vehicle and its worth if the car is declared a total loss.
Some lenders require gap waivers because they prefer the guaranteed upfront payment to the potentially time-consuming effort of recovering the total payoff amount from you, the borrower, especially if you are short on cash after a major accident.
How do I know if I have stand-alone gap insurance?
You likely have stand-alone coverage if you didn’t buy gap insurance through your car insurance company as an add-on to your existing policy. Ask your gap provider for clarity if you’re unsure.
Is gap insurance available for used cars?
Yes, gap insurance is an option for used cars. However, if you have a used vehicle, it’s a good idea to do the math and ensure this type of coverage makes financial sense. If your car isn’t worth much, you might want to skip it.
Who should buy gap insurance?
Gap insurance is crucial if you have a loan or lease on your vehicle. It can protect you financially if your car gets totaled or stolen. Plus, your lender or leasing company may require it.
When should you buy gap insurance?
If you have a loan or lease on your car, you should invest in a gap policy. Your lender might request this type of coverage, and you’ll reduce the risk of high out-of-pocket costs if your vehicle gets totaled or stolen.
How is gap insurance regulated?
Gap insurance is regulated like every other auto insurance product in your state. Your state’s Department of Insurance supervises this process. Note that many states limit how much can be charged for gap waivers. Contact your state consumer protection agency or attorney general’s office for more information.
What primary insurance coverage must I have to carry gap insurance?
To buy gap insurance, you must have collision and comprehensive coverage. If you only invest in a liability-only policy, gap insurance won’t be available.
When doesn’t gap insurance make sense?
If you own your car free and clear, you don’t need gap insurance, as this coverage is only for financed or leased vehicles. Also, if you made a significant down payment on your vehicle or you owe less on your loan than your car’s actual cash value, a gap policy isn’t worth it.
Key takeaways: How to choose the best gap insurance
Gap insurance may be a lifesaver if your car is totaled or stolen. However, don’t go with the first provider you find. Shop around and compare gap insurance quotes from several types of providers.
A reputable car insurance company will give you the lowest price and best deal, especially if you already have coverage with them.
Resources & Methodology
Sources
- Federal Reserve. “Consumers and GAP protection on vehicle financing contracts.” Accessed August 2025.
- Kelley Blue Book. “How to beat car depreciation.” Accessed August 2025.
- National Automobile Dealers Association. “Consumers and Guaranteed Asset Protection on Vehicle Loans and Sales-Financing Contracts.” Accessed August 2025.
- Consumer Financial Protection Bureau. “What is Guaranteed Asset Protection insurance?” Accessed August 2025.
Methodology
CarInsurance.com editors collected rates from Quadrant Information Services for a 40-year-old male and female driving a 2023 Honda Accord LX with a good insurance score and no violations on record for a full coverage insurance policy with limits 100/300/100 and a $500 comprehensive and collision deductible.
Read the detailed methodology for more information.
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