Gap Insurance Buyer's Guide
Hopefully this Buyers Guide will help you get the gap insurance you need at a price you can afford.
1. Car Dealership or Finance Company
Buying gap insurance from a car dealer or finance company is the most expensive option with an
average cost of $578. Gap insurance sold through a dealer is much like a high priced add on such
as Scotch Guarding your upholstery.
2. Your Current Auto Insurance Company
Purchasing gap insurance, if available, from your current insurance carrier is usually the cheapest
way to go costing only an additional $30 per year.
Here's an example from Travelers Insurance on how the cost of gap insurance is calculated.
Bill Pearse, vice president of auto product strategy and design for Travelers Insurance says
"Travelers calculates gap insurance premiums at roughly 5 percent to 6 percent of the premium
for collision and comprehensive insurance you have on the car.
On a $1,400 annual premium, with $420 to $560 of that typically for collision and comprehensive,
gap insurance would cost $20 to $30. And the cost goes down along with the cost of collision and
comprehensive as the vehicle ages."
Although many car insurance companies offer gap insurance coverage as an option, others such as
GEICO and State Farm Mutual Automobile Insurance Co. do not. Please see the Auto Gap
Insurance Online section of this web site for a listing of most of the major carriers who DO offer
gap coverage.
If your current insurance company doesn't offer gap insurance it might be an opportune time to
re-evaluate your vehicle insurance coverage and find an insurer able to provide all of your auto
insurance needs.
3. Credit Unions
Many credit unions now offer Gap insurance coverage for automobiles at very reasonable rates.
For instance, the Hudson Valley Federal Credit Union of Poughkeepsie, NY, offers gap auto
insurance for a one time payment of $105 which can be spread out over the length of the loan.
A stand alone gap insurance policy from a credit union could be a good option if your current
auto insurance company doesn't offer gap insurance.
1. Car Dealership or Finance Company
Buying gap insurance from a car dealer or finance company is the most expensive option with an
average cost of $578. Gap insurance sold through a dealer is much like a high priced add on such
as Scotch Guarding your upholstery.
2. Your Current Auto Insurance Company
Purchasing gap insurance, if available, from your current insurance carrier is usually the cheapest
way to go costing only an additional $30 per year.
Here's an example from Travelers Insurance on how the cost of gap insurance is calculated.
Bill Pearse, vice president of auto product strategy and design for Travelers Insurance says
"Travelers calculates gap insurance premiums at roughly 5 percent to 6 percent of the premium
for collision and comprehensive insurance you have on the car.
On a $1,400 annual premium, with $420 to $560 of that typically for collision and comprehensive,
gap insurance would cost $20 to $30. And the cost goes down along with the cost of collision and
comprehensive as the vehicle ages."
Although many car insurance companies offer gap insurance coverage as an option, others such as
GEICO and State Farm Mutual Automobile Insurance Co. do not. Please see the Auto Gap
Insurance Online section of this web site for a listing of most of the major carriers who DO offer
gap coverage.
If your current insurance company doesn't offer gap insurance it might be an opportune time to
re-evaluate your vehicle insurance coverage and find an insurer able to provide all of your auto
insurance needs.
3. Credit Unions
Many credit unions now offer Gap insurance coverage for automobiles at very reasonable rates.
For instance, the Hudson Valley Federal Credit Union of Poughkeepsie, NY, offers gap auto
insurance for a one time payment of $105 which can be spread out over the length of the loan.
A stand alone gap insurance policy from a credit union could be a good option if your current
auto insurance company doesn't offer gap insurance.
Gap insurance is not available in all states. The following states: CT, LA, VA, WA have not allowed
the sale of gap insurance in the past.
Prior to 2010 there were insurance brokers who offered gap insurance online as a stand alone
product. This is no longer the case.
By far, the most expensive place to purchase gap auto insurance is from an automobile dealership
or finance company. Despite the cost, this is where most consumers buy their gap insurance
simply because they're not aware that other options are available.
the sale of gap insurance in the past.
Prior to 2010 there were insurance brokers who offered gap insurance online as a stand alone
product. This is no longer the case.
By far, the most expensive place to purchase gap auto insurance is from an automobile dealership
or finance company. Despite the cost, this is where most consumers buy their gap insurance
simply because they're not aware that other options are available.
| GAP Auto Insurance Coverage |