GAP Insurance Need Calculator
GAP (Guaranteed Asset Protection) insurance covers the difference between what your car is worth and what you still owe if it's totaled. Calculate whether you're 'upside down' and need GAP coverage.
| Loan/lease balance — 12 months | — |
| Vehicle value — 12 months | — |
| Gap at 12 months | — |
| Worst-case gap (peak) | — |
| GAP coverage recommendation | — |
When a financed or leased car is totaled, your standard auto insurance pays the actual cash value (ACV) — not what you owe. If the loan balance exceeds ACV (you're 'upside down'), you owe the difference out of pocket. GAP (Guaranteed Asset Protection) insurance covers this gap. Required by most leases; often unnecessary on short-term, high-down-payment loans.
When You Need GAP
(1) Low/no down payment (<10%). (2) Loan term 60-84 months. (3) Vehicle with high depreciation (luxury, EV, high-end SUV). (4) Negative equity rolled into the loan from prior trade. (5) Any lease (most leases require GAP). If you put 20%+ down on a 36-month loan with a Toyota/Honda, skip GAP — you'll rarely be upside down.
Where to Buy
Dealer GAP: $600-$1,000 one-time. Most expensive, financed into loan (so you pay interest on the GAP fee). Avoid. Auto insurer GAP: $20-$60/year added to your auto policy. Best value if your insurer offers it. Credit union GAP: $200-$500 one-time from your loan lender. Good middle option.
When to Cancel
Cancel GAP once you've crossed the break-even point where ACV exceeds loan balance — typically year 3-4 on a 6-year loan with normal depreciation. Most GAP is refundable pro-rata. Calculate annually; many people overpay by carrying GAP for the full loan term when the gap closed 2 years in.
Last updated May 2026. Sources: CFPB GAP Insurance Guide, III Auto Insurance Basics.