Is BMW GAP Insurance Worth It?

Is BMW’s Guaranteed Auto Protection (GAP) really any better than what your insurance company offers? In most cases, the answer is no.
Written by Andrew Biro
Reviewed by Hillary Kobayashi
Like most automakers, BMW offers Guaranteed Auto Protection (GAP), a type of insurance that will pay or waive the difference between the amount you still owe on a lease or loan and the insurance settlement for a totaled vehicle—and while it’s more convenient to buy GAP through BMW, it’s usually cheaper when you purchase it through your insurance provider.
If you are planning on buying a BMW from the dealership, the dealer will most likely offer you Guaranteed Auto Protection. In the article below, we’ll break down everything you need to know about this type of coverage, including who it’s geared towards and how to get the same coverage from your
car insurance
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How does BMW GAP work?

As is commonplace amongst most modern automakers,
offers a type of insurance coverage called Guaranteed Auto Protection (GAP) to those buying a BMW new from the dealership. You’ll often see GAP offered in conjunction with other benefits, such as extended warranty coverage and
roadside assistance services
If you do decide to purchase BMW’s GAP, BMW will provide the following benefits:
  • Waives up to $50,000 of the “gap” from a covered total loss
  • Provides coverage for your primary insurance deductible up to $1,000
  • Covers your vehicle’s finance agreement terms for up to 84 months
  • Covers the amount financed up to 150% of the vehicle’s MSRP/NADA value
To put this in perspective, let’s say you purchase a new 2023 BMW Series 7 for $93,300. As soon as you drive the vehicle off the lot, it starts to depreciate in value by a rate of roughly 19%. This means that, after your first year of ownership, the vehicle will only be valued at approximately $75,700, leaving you with an upside-down loan. 
GAP insurance helps ensure that you won’t be left with a deficiency balance should your vehicle be declared a total loss.
When buying a brand new vehicle, BMW’s GAP insurance is only available during the initial financing period—that is to say, when you purchase the vehicle. Depending on your financial situation, you can either pay for your GAP insurance in full or bundle it into your loan payments
Just keep in mind that, if you change your mind later and want to add GAP coverage, you won’t be able to do it through BMW.

How much does BMW GAP cost?

If you buy your GAP insurance through a BMW dealership, you can expect to pay between $500 and $700.

BMW GAP vs. alternative GAP insurance

There is also a similar type of
gap insurance
—guaranteed asset protection—offered by most major insurance providers, including
State Farm
, and more.
GAP purchased through BMW is typically the more convenient option, but it isn’t always the most cost-effective. For a more in-depth look at the benefits and disadvantages of buying BMW’s GAP insurance vs. purchasing it through your insurance provider, take a look at the table below.
BMW Guaranteed Auto Protection
Gap coverage from your auto insurance company
Available only during the initial financing period
Is available as long as:
  • Your loan balance is greater than the actual cash value (ACV) of your vehicle
  • You're either the first or second owner of the vehicle (prior ownership guidelines aren’t the same for every insurance company)
  • Your vehicle meets both the mileage and age requirements set by your insurance provider, which usually means the vehicle has low mileage and is less than three years old
$500 to $700
Typically costs between $20 and $40 per year
Can be canceled only during the initial grace period
Can be canceled at any time
Full refund only within 30 days
Refunds are standard
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Do you need GAP insurance?

In most cases, GAP insurance isn’t necessary, though some lenders and lessors do require it as a loan or lease condition.
GAP insurance might, however, be prudent if you’ve financed or leased a vehicle and your down payment amounts to less than 20% of the vehicle’s purchase price, or if you plan on financing for a longer term. GAP insurance can also be a good idea for those who have purchased a vehicle model that depreciates in value quickly, such as the BMW 5 Series and 7 Series.
If you own your vehicle outright or if you owe less than the vehicle’s current actual cash value, you don’t need to purchase GAP coverage—you will, however, still need to purchase the
minimum car insurance required by your state

How to cancel BMW GAP insurance

Due to the fact that GAP policies tend to vary depending on dealership, lender, and state, the cancellation process isn’t the same for every BMW GAP policy. If you decide to cancel your GAP insurance, your best bet is to check your lease or loan agreement and contact the dealership where you bought the vehicle.
If you cancel your BMW GAP insurance within 30 days of purchasing the vehicle, you should be able to receive a full refund—after that, however, refunds will be limited.
In order to make things easier for yourself, we recommend getting an insurance quote for both your vehicle and your insurance carrier’s GAP insurance before purchasing the car—doing so will allow you to show the dealer
proof of insurance on your phone
while also giving you a better idea of whether to accept or decline BMW’s GAP insurance.

What is the BMW GAP insurance refund process?

If you do end up canceling your BMW GAP insurance within the first 30 days, you’ll be eligible for a full refund. In the event that you cancel your BMW GAP insurance after this grace period, you may still be eligible for a refund, but the amount will be calculated pro rata.
“Insurance companies originally charged me $189 while driving my BMW 300 miles per year. Thanks to
, I only pay $56! I’m so happy.”  —Ray T. 
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