Do you think I need to keep gap insurance after refinancing my car?

I kept gap insurance when I refinanced my car. I have 30 days to remove it if I want. I'm wondering if I need it. I have three years left on my loan. My car is worth $9,000 and I still owe $8,000 on my loan.

Answer
“Since you now owe less on your loan than your vehicle is worth, you can cancel your gap insurance. Gap insurance will only cover the difference if you owe more on your loan than your vehicle is worth.
Although you still have three years left on your loan, your balance will continue to fall. Even if your vehicle was totaled today, its value would still cover the cost of your loan. It would also leave you with some additional money to put towards a new vehicle.
You’ll also most likely receive a refund if you paid for your gap insurance upfront, as it is normally priced for the lifespan of the loan.
Be sure to reach out to your gap insurance provider with any questions about canceling your coverage. Every company is different, so there may be terms and conditions that apply to the cancellation. “
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Emily Maracle
Answered on May 03, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
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