Is Lexus Gap Insurance Worth It?
Gap insurance waives the difference between your insurance payout and outstanding loan if you total your Lexus—but do you need it?
Written by Amber Reed
Reviewed by Christelle Agustin
If you buy Lexus’ Guaranteed Auto Protection policy (aka
gap insurance
), then Lexus will pay or waive the difference between your insurance payout and the amount on your loan if your car is totaled while you have negative equity. However, the same coverage is available through most insurance providers—and at a fraction of the cost. When you buy a new Lexus, the available add-ons seem endless. Roadside assistance, extended warranty, gap insurance, crazed clown coverage… Okay, we made that last one up to see if you were paying attention.
Now that you’re here, read on to fill in the gaps in your gap insurance knowledge and decide if it’s coverage you might need. And in case you’re curious, a good
comprehensive insurance
policy should cover any clown-related mishaps!How does Lexus gap insurance work?
If you buy gap insurance coverage through Lexus, Lexus will waive or pay the difference between your insurance payout and your
car loan
or lease balance if your vehicle is totaled when you owe more than the car is worth—typically during the first few years of ownership.Like a lot of luxury car makers, Lexus doesn’t put detailed information on extended coverage options on their website, so you’ll have to speak with your dealership for the specifics on pricing. But they do allow for the policy to cover up to $1,000 of your insurance deductible and they may “reduce or even eliminate your remaining balance.”
We also know that Lexus gap insurance is only available at the time of purchase. Lexus’ website also states that “not all customers will qualify.” If you’re interested in getting gap insurance from Lexus, make sure you read the agreement paperwork carefully and feel comfortable with the terms.
RECOMMENDED
Compare auto insurance policies
No spam or unwanted phone calls · No long forms
How much does Lexus gap insurance cost?
Lexus doesn’t provide any publicly available pricing information for their gap insurance, so you’ll have to ask for an exact quote at your dealership.
In general, gap insurance policies from a dealership cost around $400 to $700. As a luxury maker, a gap policy from Lexus is likely to be on the high end of this range. It’s also important to remember that since the whole cost of the policy might be added to your loan balance, you’ll also be paying interest on it.
Lexus gap insurance vs. other insurance providers
Even if the Lexus dealership requires gap insurance for your financing, you don’t have to get it through them. Most major insurance companies offer gap insurance, including
State Farm
, GEICO
, American Family, and Progressive
. And while it may be quicker and more convenient to just throw your gap insurance in with your financing, it’s generally the most expensive option. Take a look at the table below to see some basic features of a Lexus gap policy vs. one from your regular insurance company.
Lexus Guaranteed Auto Protection | Gap coverage from your auto insurance company |
|---|---|
Only available at the time of financing |
|
See dealership for pricing info, but typically much more expensive | $20 to $40 per year |
Cancellable, see dealership for details | Cancel any time |
See dealership for refund policy | Refunds are standard |
Are you overpaying for your car insurance?
Compare quotes and find out in 45 seconds.
4.717k Ratings5M+Drivers Joined
7M+Cars Garaged
Do you need gap insurance?
Gap insurance can be a real lifesaver in some circumstances, but it’s not always necessary or worth it for everyone.
If you’ve leased or financed your Lexus, many lenders require you to carry gap insurance—particularly if you have a long loan term or make a small down payment. Make sure you know the terms of your lease or financing agreement regarding gap insurance.
Even if it’s not required, gap insurance is often well worth the money. Depreciation is a cruel master, and it begins the second you leave the dealership. Let’s say you buy a new 2023
Lexus RX 350
for $55,350. No matter what you do, it’s going to lose 15% to 20% of its market value in the first two years of your ownership. During these early years, it’s possible that you could be upside down
in your loan, which could mean owing thousands of dollars in the event of a total loss. Gap insurance takes that stress away. On the other hand, it’s not always worth it! If you put a hefty 30% down payment on your RX 350, then you’re highly unlikely to have negative equity on it at any time—and gap insurance would be unnecessary. It’s also generally not needed for used cars, unless you’re buying a vehicle that’s particularly valuable or rare.
What’s the Lexus gap insurance cancellation and refund process?
Again, publicly available details are rather scant here. The online brochure states that the policy is cancellable, but doesn’t give any details about the cancellation process or the availability of refunds.
In most cases, you can get some kind of a refund when you cancel a gap insurance policy, but it can get a little more complex if your policy is through the dealership. If you’re considering a gap insurance policy through Lexus, make sure you ask questions about the cancellation and refund process.
"WOW.Jerryhas been so easy to use. I called a representative when I wanted some clarification, and they walked me through the entire process of finding a new rate for full coverage on my luxury vehicle.” —Beth G.
RECOMMENDED
Thousands of customers saved on average $887/year on their car insurance with Jerry
This app is great, but the customer service is even better! Not to mention convenient! My husband and I got the lowest rate (much lower than the rates I was finding online through my own searches), quickly, and pretty much all through text message! Thank you so much for a hassle free experience👍
Gabriella R.
Find insurance savings
4.7/5 Rating on App Store
Are you overpaying for car insurance?
Compare quotes and find out in 45 seconds.
4.7You might also be interested
