How much does gap insurance cost?

Is gap insurance expensive? I'll be pretty far upside down as soon as I start my car loan. To offset the cost between my loan and cash value of the car, I want to get gap insurance if I can afford it.

Answer provided by
Eric Schad
Answered on Jul 21, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
“The amount you pay for gap insurance depends 100% on who you buy it from.
Generally speaking, banks and dealerships will charge somewhere between $400 and $700 in one lump sum for the coverage. This amount is usually rolled into your car loan, so you also pay interest on it for the duration of the loan.
The cheapest option (depending on the length of your loan) is almost always going with your car insurance company, as this usually costs about $5 to $15 per month and you can remove it at your discretion.
Remember that you won’t need gap insurance for the entire time you own the car; you only need it until you reach the break-even point between your loan balance and the actual cash value of the vehicle.”

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