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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.
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
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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- Gregory R.
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