Gap insurance covers the difference between what you owe on your vehicle and its actual cash value if it's totaled or stolen. But is it worth the cost?
When Gap Insurance Is Essential
- You put less than 20% down on your vehicle
- You're financing for 60 months or longer
- You drive high-mileage, causing faster depreciation
- You rolled negative equity from a previous loan into your current one
When You Can Skip It
- Your loan balance is less than your car's value
- You made a large down payment
- You have savings to cover the gap
- Your car is paid off or nearly paid off
How Much Does It Cost?
Gap insurance typically costs between $20-$40 per year when added to your auto policy — far less than getting it through a dealership, which can charge $500-$700.
Ask your BlackArrow agent whether gap insurance makes sense for your situation.
