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Is Hyundai Gap Insurance Worth It?

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If your Hyundai is totaled, Hyundai
GAP insurance
will take care of your debt—but can you get peace of mind cheaper elsewhere?
When you're looking over the paperwork at the dealership, it's hard to tell whether you need gap insurance. In most cases, the policy comes with dire warnings about what could happen if your car depreciates faster than you can pay it off. No sweat—we’ll tell you whether Hyundai GAP insurance is worth it right now! Here's an overview of what it does, why you might need it, and how to find out if it’s necessary for you.

How does Hyundai GAP insurance work?

Let's say you qualify for a
car loan from Hyundai
. You sign the dotted line, promising to pay back every cent you’ve borrowed in exchange for the latest
Palisade SE
. You drive away and everything is great… until disaster strikes! Your car has been stolen. Even worse, the
actual cash value (ACV)
of your car comes several thousand dollars short of paying off your loan.
That’s the moment when you’ll wish you had Guaranteed Asset Protection (GAP) insurance. It pays for the difference between a total loss payout and your debt.
Hyundai’s GAP insurance policy
offers:
  • A waiver of some or all of the “gap” between your vehicle’s ACV and your remaining debt
  • A waiver of up to $1,000 of your primary insurance deductible
  • A waiver of up to $50,000 of covered losses
  • No mileage limits
  • No deductions related to car depreciation
Imagine that you buy a car for $25,000 and then get into an accident. At the time of loss, the vehicle's ACV is $18,000, from which your insurance company further subtracts a $1,000 deductible. You still owe $22,000, so after you apply the insurance payout, you’re still on the hook for $5,000.
It's a good thing you have GAP insurance! It pays off the remainder and releases you from your
car loan
. Now you can put the accident behind you and step into a brand-new car without worrying about your finances or your credit score.
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How much does Hyundai GAP insurance cost?

Hyundai GAP insurance costs are determined by how much money you borrow, your interest rate, and the length of your loan. Hyundai typically charges a flat rate of $500-$700 for each plan. Keep in mind that you'll end up paying interest if you include the cost in your financing contract!

Hyundai GAP insurance vs. the competition

Hyundai isn't the only car dealer or company to offer GAP insurance. Most major car insurance providers offer this coverage, including
GEICO
,
Progressive
, and
Allstate
. Not all policies are created equal; here are the pros and cons of buying from Hyundai vs a third party:
Hyundai Motor Finance Guaranteed Asset Protection
GAP insurance from your existing provider
Only available at the time of financing 
Available as long as: 
  • Your loan balance is greater than your vehicle’s ACV 
  • You are the first or second owner of the vehicle (prior ownership guidelines vary by insurance provider)
  • The vehicle meets your insurance provider’s age and mileage requirements, generally meaning the car is less than three years old and has low mileage 
$500 to $700 flat rate
$20 to $40 per year
Interest may apply
No interest applies
Cancellation only during the grace period
Cancel anytime
Limited refunds
Refunds are standard
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Do you need gap insurance? 

You should consider GAP insurance if your car will depreciate rapidly, leaving you with an upside-down or underwater loan that demands more money than your car is worth.
Hyundai's depreciation rates
aren't the worst in the industry, but that partially depends on which model you buy. After five years, the sensible
Elantra
will retain most of its value, but the
Santa Fe
won't.
Here’s how to tell if you need GAP insurance:
  • You made little to no down payment. A down payment reduces your loan before your car depreciates. You're at risk of borrowing more than you can afford to repay if you've paid less than 20% up front.
  • You arranged a long-term loan. It may require smaller monthly payments, but a long-term loan will almost certainly fall behind your car's depreciation rate. New cars depreciate by up to 15% the moment you drive them off the lot. 
  • You drive a lot.
    Wear and tear
    contribute to depreciation, so GAP insurance can help protect your investment in a high-mileage car.
Hyundai makes GAP insurance mandatory on certain leasing agreements. Check your paperwork to be sure.

How to cancel Hyundai gap insurance

There is a grace period to cancel Hyundai GAP insurance with a full refund, but you’ll need to call for details. Typically, it’s between 30-60 days. Contact your local dealership to start the cancellation process, or get in touch with the
Hyundai Motor Finance Company
at 1-800-523-4030.
The maximum refund you can receive depends on several factors:
  • If you missed the grace period, you may as well make use of the coverage until your loan is lower than your vehicle’s ACV. 
  • If you paid for gap insurance in full, you’ll receive a refund for the unused portion, prorated by the amount of time you kept the car. 
  • If you pay gap insurance from month to month, you won’t be able to get anything back.

What is the Hyundai gap insurance refund process?

When you notify the bank that you want to cancel GAP insurance, they may ask you to complete a cancellation form. You might also have to fill out an odometer disclosure statement. The law doesn't require GAP insurance, so unless it's part of your finance contract, you don't have to keep it.
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