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How do I get around gap insurance?
You may be able to skip gap insurance if you made a down payment of at least 20% on the car when you bought it, or if you're paying off the car loan in less than five years. You don't need gap insurance for the life of the car, just until your loan balance doesn't exceed the car's value.
What happens if you don’t use your gap insurance?
You'll only receive a refund for the GAP insurance that you haven't used. For example, if you cancel your policy after three months of coverage, you'll only get a refund for the remaining nine months (if you paid for a year of coverage). The amount of your refund is based on how you pay your insurance bill.
Is it smart to cancel gap insurance?
It makes sense to cancel gap insurance once your loan balance is less than your vehicle's actual cash value. Drivers who pay their gap insurance premium upfront may receive a refund when they cancel their policy.
Can you remove gap after purchase?
If you're just learning about your gap lease or loan options and you've already purchased a policy through your dealer, it's not too late. You can remove a gap policy from your car loan, though you'll need to be careful to be sure you're protected during the transition.
Can you cash out your gap insurance?
Insurance companies may have a specific cutoff deadline for GAP insurance refunds, but usually you can qualify for a refund at any point before the policy period expires. For example, if you purchase a GAP policy that should last 36 months but cancel after 24 months, then you may be able to request a refund.