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Guaranteed Asset Protection, also known as a GAP waiver, is an add-on coverage from a lender or third-party insurer, separate from your liability or collision insurance. It protects you from owing the difference between what the car is worth and what insurance pays out if the vehicle is totaled or stolen. You can think of it as covering the “gap” between your car’s actual cash value and the balance of your loan.
If you have paid your loan off early, such as through auto loan refinancing, or canceled your policy you may be eligible for GAP refund. Here’s how it works — and how to claim it.
Yes, you can cancel GAP coverage.
If you no longer need GAP, perhaps because your loan is paid off or you’re refinancing, then it makes sense to cancel it. After all, if there’s no financial gap left to cover, you won’t need the coverage.
If you prepaid for a GAP waiver or still have months remaining on your contract, you may be eligible for a GAP refund as well. The refund would be pro-rated to account for the unused portion of your premiums. You wouldn’t be able to request a refund if your car was totaled and you made a claim on the policy.
To request a GAP refund, you’ll need to reach out to the GAP provider. Follow these steps:
For the smoothest refund, make sure you meet the provider’s timeline and documentation requirements.
You generally can’t keep or transfer your GAP after you refinance. GAP coverage is tied to the loan, not the vehicle. If you refinance, you should cancel your old GAP insurance and consider protection for your new loan.
Refinancing with GAP coverage ensures that you’re still protected if there’s a gap between your car’s actual cash value (ACV) and the payoff amount of your refinance loan. If your car is stolen or deemed a total loss after a claim, this protection helps you avoid having to pay on a loan for a car you can’t drive anymore.
One of the easiest ways to protect yourself is to choose a refinance loan with a GAP waiver. This protection waives the difference between the loan amount and the vehicle’s ACV, so you won’t have to worry about paying it if your car is stolen or totaled.
When you refinance with RefiJet, a GAP waiver can be rolled into your new loan, providing peace of mind that you’ll be protected should something happen to your vehicle when your loan balance is higher than the value of the car. Learn what RefiJet’s Guaranteed Asset Protection (GAP) includes and whether you should include it in your auto refinance.
Below are some of the most frequently asked questions about getting a GAP refund.
No, you won’t automatically receive a refund on your GAP insurance if you pay off your auto loan early. You’ll need to let your GAP provider know you’ve paid off the car and provide documentation of the payoff.
You may be eligible for a GAP insurance refund if you paid for the policy upfront and later sold or refinanced the car. If you signed up for monthly payments and still have time remaining on your policy, you might qualify for a refund of the portion of the policy you haven’t used.
Since refunds on GAP insurance aren’t automatic, your first step is to reach out to your GAP provider. Ask them what process to follow and forms to fill out to secure a refund on the rest of your GAP policy.
If you never use your GAP coverage, it’s probably a good thing — it means your car was never totaled or stolen. It will expire at the end of the contract term, or you can cancel it early. Canceling it may mean you’re entitled to a refund for the remaining coverage.
Considering refinancing your Kia Motors Finance loan? Learn whether Kia Finance offers refinancing, how Kia refinancing works, and what options you have with RefiJet.
