Are you purchasing or leasing a new car and need GAP Coverage? Find out how to get GAP Coverage and keep your Geico Policy! Or perhaps you want to know which auto insurance companies offer GAP coverage?
Keep reading to uncover other options for GAP Coverage. Plus, verify whether you need GAP Coverage. By the end of the article, you’ll be informed and ready to make smart choices about GAP Coverage.
Does Geico Offer GAP Insurance?
Geico does not currently offer any GAP Insurance coverage. That doesn’t mean Geico policyholders are out of luck. There are a variety of lenders that offer GAP Insurance.
Of course, Geico customers also have the option to shop around for an auto insurance policy with coverage.
Keep reading and we’ll help you discover other ways to get GAP insurance, including some tips most have never heard!
Other Options for GAP Coverage
For Geico customers hoping to keep their Geico policies, simply select a lender that offers GAP Coverage. Remember that GAP Coverage costs will vary, but that’s only one factor in determining the best loan. You’ll also need to factor in interest rates.
Here are some lending options with GAP Coverage. Be sure to ask your lender about GAP coverage and pricing when you get an auto loan quote.
- Car Dealerships are a popular option for financing or leasing new vehicles.
- Banks like State Farm Bank offer auto loans with GAP coverage. State Farm’s coverage is called Payoff Protector.
- Local credit unions frequently have loan options for members like GAP Coverage.
Pro Tip: Once you find a lender with a competitive interest rate, you can ask the dealership if they’ll match or beat the competitor’s rate. That way, you may be able to get a better deal on both interest rates and GAP Coverage.
If you’d like to add GAP Coverage to an Auto Insurance policy, there are a handful of auto insurance companies that offer GAP Insurance. This coverage is frequently less expensive than the coverage offered through a lender.
Auto Insurance Companies with GAP Coverage Options
- Liberty Mutual
- Nationwide
- Allstate
- The Hartford
- Progressive
- Amica
Pro Tip: Even if GAP Coverage is cheaper through an auto insurance company, you don’t want to pay significantly more for the rest of the policy. Make sure you’re still getting a good deal on the entire auto insurance policy before switching to another auto insurance company rather than using a lender GAP Coverage.
GAP Coverage Costs
GAP Coverage costs depend on whether you select coverage through a lender or an auto insurance company. GAP Coverage is typically cheaper through auto insurance than as an addendum to the loan.
If you’re leasing a car, the dealership may require you to have GAP Coverage built into the lease payments. Check your lease agreement to see how much the dealership charges for this coverage.
GAP Coverage through a dealership is frequently a one-time payment of several hundred dollars. For other lenders, GAP Coverage may cost an additional monthly fee until the loan is repaid or the coverage is canceled.
Pro Tip: Consider paying enough down on the vehicle to avoid needing GAP Coverage at all. It’s more cash upfront but can potentially save you hundreds of dollars on the total cost of purchasing a new car.
When Do You Need GAP Coverage?
For car purchases, GAP Insurance covers the difference between the actual cash value and the remaining loan balance. This is because Collision and Comprehensive Insurance Coverage only pays out for the cash value of the car rather than the remaining loan balance.
If you are buying a new car, you need GAP Coverage if you won’t be able to pay the difference between an insurance payout and your loan balance. Customers can also avoid needing GAP Insurance by paying enough down to cover the car’s depreciation after driving it off the lot.
For anyone leasing a vehicle, the GAP Coverage is usually built into the lease agreement through the dealership.
To recap, you can forgo GAP Coverage for the following circumstances:
- Buying a pre-owned car where the loan balance is the same or close to the actual cash value
- Buying any aged vehicle outright with cash
- Paying more than 20% down or enough to cover the depreciation of the new car upfront
- Having enough savings on hand to cover the difference between the insurance payout and the remaining loan balance
Frequently Asked Questions
What is the most Gap Coverage will Pay?
Gap Coverage will only pay or waive the difference between the actual cash value of the car paid by insurance and the remaining loan balance. GAP Insurance does not cover missed or late payments.
How much will you get with a GAP Insurance Refund?
Refunds on GAP Insurance depend on when coverage was canceled. For example, if you have a six-month policy and cancel after two months, your refund will be for the four months without coverage.
Does GAP Insurance pay off your loan?
GAP Coverage pays or waives the difference between the insurance payout in a total loss and the remaining loan balance. This coverage does not apply to mechanical failures.
Does GAP Insurance cover a blown engine?
GAP Insurance does not cover a blown engine or any other mechanical failure of the vehicle. GAP Insurance only applies to total loss as a result of an accident, theft, or natural disaster.
How long does GAP Coverage Last?
GAP Coverage lasts for as long as the agreement stands. For dealerships with a one-time upfront fee, this is for the life of the loan. When the GAP Coverage is part of an auto insurance policy or loan addendum, then it lasts as long as you maintain coverage.
Resources
Geico (2022). Glossary of Insurance Terms and Definitions. Retrieved December 28, 2022, from https://www.geico.com/information/insurance-terms/
Jesse Cunningham V is a professional writer and licensed insurance agent. He has worked in the insurance industry in different capacities, starting as a customer service representative and working his way up to an independent agency owner. He is licensed in the states of Maryland and Pennsylvania for Property, Casualty, Life, and Health products. Jesse has worked with many national carriers, including Nationwide, State Farm, Travelers, and Liberty Mutual, and specializes in car and home insurance and health, life, accidental death, and disability insurance. He writes for multiple publications including FIXD and Bauple.com. All articles by Jesse are opinion-based. Speak with your licensed insurance agent about the particulars of your insurance before making any decisions.
