GAP Insurance Cost Calculator
If your car were totaled tomorrow, would your insurance payoff cover your loan? This calculator estimates the gap, and the guide below shows where to buy the coverage cheapest.
GAP insurance covers the difference between your auto loan balance and the car's actual cash value if the car is totaled or stolen. The gap is largest early in the loan, especially with a small down payment or a long term. Typical GAP costs: $400 to $700 from a dealer (often rolled into the loan, where you pay interest on it), $20 to $40 per year added to an auto insurance policy, and $200 to $300 from a credit union or lender. Cancel GAP once your loan balance falls below the car's value; many dealer and lender policies refund the unused portion pro rata.
Data current as of October 2026. Depreciation uses a simplified curve (about 20% in year one, then about 10% per year); your car's actual depreciation varies. Cost ranges are typical market ranges; verify with your insurer or lender.
How the math worked
This is an estimate for planning only, not financial or insurance advice. The depreciation curve is simplified; your insurer determines actual cash value from comparable sales. GAP costs and refund rules vary by state, insurer, and lender. Confirm terms before buying or cancelling coverage.
How GAP insurance actually works
GAP insurance covers one specific shortfall: the difference between what you owe on your car loan and what the car is actually worth if it is totaled or stolen. Your standard auto policy pays actual cash value, the depreciated market value, not your loan balance. Early in a loan, especially with a small down payment or a 72- to 84-month term, the balance routinely exceeds the value, and that difference is the gap.
The gap is largest in the first year or two, when new cars lose roughly 20% of their value while loan balances barely move. It shrinks as payments accumulate and eventually disappears, usually two to four years in. That lifecycle drives every GAP decision: buy it when the gap is real, cancel it when the gap is gone.
Where you buy GAP matters enormously. Dealers typically charge $400 to $700 and often roll it into the loan, which means you pay interest on the GAP premium itself. Auto insurers typically add GAP for $20 to $40 per year on your policy. Credit unions and lenders typically charge $200 to $300 as a one-time fee. Same coverage concept, wildly different prices, so the dealer finance office is usually the most expensive place to buy it.
Typical GAP insurance costs by source (illustrative, October 2026)
| Source | Typical cost | How you pay | Notes |
|---|---|---|---|
| Car dealer | $400 - $700 | Rolled into the loan | Most expensive; you pay interest on the premium |
| Auto insurer | $20 - $40 per year | Added to your policy | Usually cheapest; cancel anytime |
| Credit union or lender | $200 - $300 | One-time fee at signing | Often pro-rated refund if cancelled early |
Download the GAP cost comparison as CSV
Typical market ranges, October 2026. Verify pricing with your insurer or lender; costs vary by state and vehicle.
Learn more about GAP insurance
- What Is GAP Insurance and Do I Need It?
- GAP Insurance Cost: Dealer vs Auto Insurer vs Lender
- When to Cancel GAP Insurance
- GAP Insurance vs New Car Replacement Coverage
- Is GAP Insurance Worth It on a Lease?