The Best Gap Insurance Companies in Arkansas

Gap insurance in Arkansas is optional, but it could keep you from financial ruin in the worst-case scenario.
Written by Macy Fouse
Reviewed by Amy Bobinger
Arkansas law doesn’t require drivers to have
gap insurance
, but it’s still wise to have it if you finance or lease a vehicle. If your car gets stolen or totaled and you owe more than it’s worth, gap insurance makes up the difference. 
Arkansas drivers can get gap insurance from three different places: the dealership you bought or leased the vehicle from, the bank or credit union in charge of your
car loan
, or your car insurance company. The first two might be easier to tack on in the purchasing process, but getting your gap insurance from your insurance provider will almost certainly be the cheapest option. Not all insurance companies offer gap coverage, though!
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The best gap insurance companies in Arkansas

Some of the most popular insurance providers in Arkansas don’t offer gap insurance. For instance, neither
State Farm
sells traditional gap insurance in the state or at all. If you’re shopping for gap insurance in Arkansas, you may have to
switch insurance companies
to find it. 
To make sure you’re getting the best deal on Arkansas gap insurance, it’s best to compare quotes from at least three to five different companies. 

How does gap insurance work in Arkansas?

Gap insurance—also written as GAP insurance because it stands for “guaranteed asset protection”—is the same in Arkansas as it is in other U.S. states. In the event of a total loss accident, this insurance covers the difference between the balance of a loan or lease and the financed/leased vehicle’s
actual cash value
If you purchase gap insurance from an insurance company, you can only add it to a policy that already includes
collision coverage
comprehensive coverage
. But you only need gap coverage if you’re financing or leasing a car. If you own your car outright and you’ve already paid your total loan, there’s no need for you to have this coverage. 
The dealership probably offered you gap coverage when you got your car, but if you turned that down, we don’t blame you. Gap insurance from a dealership is usually more expensive in the long run. But you may still be able to add gap coverage to your insurance policy through an insurance provider. For that, most of them require you to meet the following criteria:
  • The vehicle is less than three years old
  • The vehicle has never been majorly damaged
  • You are the vehicle’s first owner (or second, in some cases) 
  • The vehicle meets the company’s value and mileage requirements

What does gap insurance cover?

You may already know that a new car loses about 5% of its value the second you drive it off the lot, but that rate doesn’t slow down afterward. The
Insurance Information Institute (III)
reports that the majority of new vehicles lose around 20% of their value within the first year of ownership. 
Most folks can’t pay off 20% of the auto loan balance within a mere twelve months, so that’s where gap insurance comes in. If you total your vehicle, gap insurance pays the difference between the car’s current value—which is what your collision insurance will cover—and the rest of your loan amount. Some gap insurance policies even cover the
insurance deductible
Here’s an example. Imagine you took out a $30,000 car loan to finance a new car and you’re feeling protected with your full coverage insurance. Sometime in the first year, you suddenly have a freak accident and total your new car—and the insurance company appraises the car’s value at just $24,000. The problem is, you still owe $27,000 on the loan, meaning you owe the lender that extra $3,000… plus the cost of getting a new car
If you have gap coverage on your insurance policy, this won’t be a problem. All you have to do is submit an additional claim to your insurance with the settlement from your collision claim, and the rest of your loan balance will be paid.

Average monthly cost of gap insurance in Arkansas

As with all other coverages, the actual cost of gap insurance in Arkansas depends on several factors, including your driver profile and the type of vehicle you’re insuring. For the most part, gap insurance costs between $2 and $30 a month if you add it to your current insurance policy. 
If you get gap insurance from your dealership or lender, you’ll have to pay it in a lump sum—which could cost you anywhere from $200 to $700. 

Is gap insurance worth it in Arkansas?

Arkansas gap insurance isn’t mandatory and not every driver needs it. But for most drivers who finance their vehicle, it’s well worth the price. You should consider gap insurance if you:
  • Financed a car with a quick depreciation rate (e.g., a
    or another
    luxury car
  • Made a low
    down payment
    on your new vehicle (e.g., less than 20%) 
  • Drive more than 15,000 miles per year
  • Chose a longer
    loan term
    (e.g., 72 or 84 months) 
  • Still have negative equity left from a former car loan
When you get gap insurance as an add-on coverage through your provider, your insurance rates won’t go up by much—and the extra protection is worth it if you end up totaling your car. 
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