Where To Find Stand-Alone Gap Insurance In 2024
According to the Insurance Information Institute, cars can lose up to 20% of their value in the first year of ownership. So what happens after an accident if you owe more on a lease or loan than what your vehicle is worth? This is where gap insurance comes into play.
Guaranteed Asset Protection, more commonly known as Gap insurance, covers the difference between the actual cash value of your vehicle and the outstanding amount of your loan/lease. It’s an essential part of your auto insurance policy and as an industry veteran, I always recommend it. To illustrate how this works, consider the following scenario.
You take a loan out on a new car for $20,000 but get into a car accident later in the year. If the actual cash value of your car is now $16,000, there is an additional $4,000 that needs to be paid. Fortunately, insurance companies and other entities offer gap coverage, which will help in this situation.
Key Takeaways
Gap insurance covers the difference between the actual cash value of your car and the amount owed on your lease or loan
It can be purchased as a stand-alone coverage but is often more expensive
Dealerships will allow you to roll gap insurance into the cost of your loan
Most car insurance companies will offer gap coverage at a much lower price
Can I Buy Stand-Alone Gap Insurance?
You can buy a stand-alone gap insurance policy or purchase it as part of your auto insurance, whichever you prefer. However, you cannot stack coverage by purchasing both, it is either one or the other. In general, buying gap insurance as part of your standard auto insurance is the most cost-effective option.
Many car dealerships and credit unions offer gap insurance, but they are often more expensive than adding it to your car insurance policy. Car dealerships can be a high-pressure situation and it’s best to do your research before getting there. Being armed with the cost of different cost options at the dealership will empower you to decline the coverage offered if that is what you decide is best.
Note: To find the best price, I recommend reaching out to your insurance company once you’ve narrowed down a specific car. They will be able to quote the cost of insuring that car with the gap coverage included, which can be helpful at the dealership!
What Is The Cost Of Stand Alone Gap Insurance?
The cost to add gap insurance to your car insurance policy will vary depending on the company and your vehicle. Buying a stand-alone policy is usually a flat fee and customers can expect to pay between $150-$300 a year on average. Car dealerships and credit unions are usually where customers can find stand-alone policies for gap insurance.
Based on my research, here are some of the top companies that offer stand-alone gap coverage and the prices per year.
| Company | Price |
| AAA Gap Insurance | $299 |
| AutoPay Gap Insurance | $250 |
| Gap Direct Insurance | $185 |
| Local Government Federal Credit Union | $675 |
Note: You can save money by purchasing gap insurance through your car insurer. If you are going to lease or finance your car, be sure to choose an insurance company that will offer this coverage. Purchasing gap insurance from a dealership can cost you 17.5% more money on average, not including interest.
Where Can I Buy Stand-Alone Gap Insurance?
While some banks and credit unions offer stand-alone gap insurance policies, there are three major players in the gap insurance space. These companies are EasyCare, AutoPay, and Gap Direct. Here is a quick breakdown of each.
EasyCare
In business since 1984, EasyCare offers stand-alone gap policies up to $50,000 in coverage for both vehicles and RVs. Some of its other benefits are as follows:
- Coverage up to $1,000 for your deductible
- Provides coverage up to 150% of your car’s replacement value
- Provides coverage up to 135% of the replacement value of recreational vehicles
- Protects vehicles for up to 7 years and recreational vehicles for up to 10 years
Coverage is offered as a flat fee that must be paid at the time of vehicle purchase and the amount of this fee can vary depending on the type of vehicle. Customers can choose to roll this fee into their vehicle financing, but they will be charged interest.
Autopay Gap Insurance
Autopay is an auto loan aggregator that has been around for over a decade. They have served over 700,000 customers during this time and offer gap coverage as an additional service. Customers can purchase gap coverage and roll it into the cost of their loan.
Similar to EasyCare, there are a few benefits offered with Autopay Gap coverage:
- Provides coverage up to $100,000 and losses up to $50,000
- Protects vehicles for up to 7 years
- Coverage up to $1,000 for your deductible
- Provides coverage up to 125% MSRP
Gap Direct
Gap Direct offers gap insurance that is underwritten by Western General Insurance Company. The cost starts at a flat rate of $185 and is more affordable than typical gap coverages purchased through dealerships. The following are the benefits provided:
- Provides coverage up to $25,000 of outstanding financing balance
- Coverage provided for 2 or 3-year terms
- Coverage up to $1,000 for your deductible
Note: Fair warning to consumers, Western General Insurance Company was liquidated by the State of California in August of 2021. This means that they were insolvent and unable to meet their financial obligations. While Gap Direct is still in operation, you should confirm who is underwriting their program before purchasing.
FAQs
Can I get stand-alone gap insurance?
Yes, you can! Stand-alone policies are often offered through car dealerships, credit unions, and other financial institutions. However, the cost is often much higher than purchasing through your car insurer.
What does stand-alone gap insurance cost?
Stand-alone gap coverage can vary depending on your vehicle. But customers can expect to pay between $150-$300 on average.
