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How to Get a Toyota Financial Gap Insurance Refund

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In the event of an accident, your primary auto insurance may cover costs up to the market value of your vehicle. The issue is that the market value may be well under the amount you still owe for financing. That’s where guaranteed auto protection (gap) insurance comes into play. This kind of coverage fills in the gap between the amount provided by your insurance settlement and the remaining balance of your contract.

If you own a Toyota, you can get gap coverage through Toyota Financial Services. See how this bit of added protection can benefit you and what your options are should you decide to cancel your protection.

What Is Toyota Financial Services?

Toyota Financial Services is the official finance branch of the Toyota Motor Corporation. The brand comprises the subsidiary brands Toyota Motor Credit Corporation and Toyota Motor Insurance Services. Together, they provide products and services that relate to vehicle leasing, financing, and protection plans to Toyota owners, dealers, and affiliates.

Through Toyota Financial Services, you can explore rebate and finance programs, determine whether to lease or buy a new Toyota, gain a better understanding of your credit, and sign up for various protection plans. Toyota Financial gap insurance is just one of the protection options available to you.

Understanding Toyota Financial Gap Insurance

Toyota Financial gap insurance is an optional coverage product that comes in handy in the event of a total loss. The definition of “total loss” is a situation in which a vehicle is irreparable or the cost of repairing it exceeds its value. In total loss situations, your insurance company may base its settlement offer on the value of your vehicle minus depreciation. Often, this value falls short of the balance remaining on your finance agreement. The result is a deficiency balance — the difference between the money you owe and the settlement offer — which you must cover.

For example, imagine that you take out a loan to finance your purchase of a new $20,000 Toyota Corolla. You pay off $3,000 on the loan before you find yourself involved in a wreck. Your insurance company declares the vehicle a total loss and offers a settlement commensurate with the depreciated value of the model at the time of the accident: $15,000. Unfortunately, that leaves a deficiency balance of $2,000 that you still owe the lender.

Aside from particular fees, Toyota Financial gap insurance will waive the deficiency balance or provide you with a refund that covers your out-of-pocket expenses. In most states, the protection plan may also cover up to $1,000 of your auto insurance deductible.

Benefits of Toyota Financial Gap Insurance

The primary benefit of Toyota Financial gap insurance is that it can cover a deficiency balance of up to $50,000. Aside from that, as well as the $1,000 coverage on your deductible, the plan provides additional benefits that include:

  • Loan amount coverage up to 150% of the MSRP of a new vehicle
  • Improved ability to acquire a replacement vehicle
  • Avoidance of potential damage to your credit
  • Ability to cancel and refund the plan as needed

Determining Whether You Need Toyota Financial Gap Insurance

Gap insurance is optional, so it’s up to you to decide whether you need it. To help you decide whether you’re likely to benefit from gap insurance, consider the following questions:

  • Do you plan to put less than 20% down on your vehicle? If so, you’re more likely to pay off your loan over a longer period, leading to greater depreciation and a higher chance of a larger deficiency balance.
  • Do you intend to lease your vehicle for a longer period? As with a low down payment, a long lease period means your vehicle’s likely to depreciate faster than you can reduce your balance.
  • Do you plan to finance a vehicle that’s likely to depreciate rapidly? Some vehicles, particularly luxury models, depreciate more quickly than others, increasing the chances that their market value will fall well short of the loan balance.
  • Do you drive a lot? Putting more miles on your vehicle over a shorter period tends to depreciate its value more rapidly, which can extend the size of a potential deficiency balance.

Purchasing Toyota Financial Gap Insurance

If you decide that you’d like to purchase Toyota Financial gap insurance, do so at the time you buy or lease your vehicle. Toyota Financial Services offers this coverage through dealers only at the point of sale. To facilitate timely fulfillment and provide added convenience to consumers, you may be able to absorb the coverage into your finance contract, allowing you to pay it off along with your loan. Ask your dealer to determine your eligibility.

Getting a Refund on Your Toyota Financial Gap Insurance

There are a few situations in which you may want to seek a Toyota Financial gap insurance refund. The first is when you change your mind about your need for coverage. In this case, you can usually cancel your gap insurance plan within 30 days of the initial purchase. Provided that you haven’t been involved in an accident during those 30 days, you may be able to receive a full refund. If you’re just beyond the 30-day window, a full refund may still be possible. In either case, speak with the dealer from whom you purchased your vehicle.

Other common instances that may merit a Toyota Financial gap insurance refund are when an owner:

  • Fully pays off the covered vehicle
  • Pays off enough of the balance that it’s well below the market value
  • Sells or trades in the vehicle
  • Decides to change to a different gap insurance provider

In any of the above instances, Toyota Financial Services might be willing to provide you with a prorated refund on the gap insurance you have through the brand. Depending on your circumstances, you may have to provide documentation that verifies the payoff or transfer of ownership. For a more comprehensive understanding of your options and eligibility, consider speaking with the dealer through which you purchased your Toyota Financial gap insurance or reaching out to Toyota Financial Services directly.

Hopefully, this information helps guide you through the decision-making process concerning Toyota Financial gap insurance. Remember to read your contracts and other agreements thoroughly so that you’re fully aware of your obligations and expectations.

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

We’re here to help you simplify car care and save, so this post may contain affiliate links to help you do just that. If you click on a link and take action, we may earn a commission. However, the analysis and opinions expressed are our own.


About the Author

FIXD Research Team

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

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