| Option | Typical Cost |
|---|---|
| Under $20K | $160–$200 |
| $20K–$35K | $200–$325 |
| $35K–$50K | $240–$390 |
| $50K–$75K | $280–$455 |
| $75K+ | $400+ |
Compare providers near you
| Source | Cost | Coverage |
|---|---|---|
| Dealer (at purchase) | $400–$800 | Marked up 200–300% |
| Car insurance company | $20–$60/year | Add to existing policy |
| Standalone policy | $200–$400 one-time | Direct purchase |
| Credit union (loan gap waiver) | $0–$250 | Included with some loans |
GAP insurance covers the difference between what you owe on your car loan and what the car is worth if it is totaled or stolen. On a $35,000 car with $5,000 down, you could be underwater by $3,000–$8,000 in the first 2–3 years. Never buy GAP from the dealer — they mark it up 200–300%. Add it to your auto insurance policy ($20–$60/year) or get it from your credit union. GAP is essential for: low or zero down payments, 60+ month loans, and cars that depreciate quickly.
Gap Insurance premiums are calculated from risk factors specific to your situation. Carriers weigh these factors differently, which is why quotes vary so widely. Your claims history, location, coverage limits, and deductible all interact to determine your rate.
The cheapest policy is not always the best value. Coverage exclusions, claim response times, and financial stability of the carrier matter when you actually need to file a claim. Check AM Best ratings for financial strength and J.D. Power for customer satisfaction before choosing based on price alone.