It may take some effort to navigate your dealership’s return policy for gap insurance. You’ll need to get in touch with the dealership’s insurance provider, and you should generally wait until you have a new gap lease or loan coverage in place before canceling. Your reimbursement for the gap insurance could take a few days to several weeks to arrive. Here are the requirements for terminating a dealership’s gap insurance.
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Locate your vehicle purchase agreement from the dealer
Make sure you have copies of the documents you signed when you purchased your car. Ask the dealership for duplicates if you can’t find them. They might be able to send you copies by email, which can save you time.
Contact the dealer’s gap lease or loan insurance provider
Ask the organization you are now insured by what has to be done to terminate your gap insurance. The request for cancellation may need to be in writing, but you might be able to scan, email, or fax it instead.
Provide your current contact information
Make sure the insurance provider for the dealership has your most recent address. Without it, the check can be delivered to a former address.
Purchase alternate gap lease or loan coverage now
Before canceling your current policy, get in touch with your American Family representative and make a purchase so that the coverage is activated. Before canceling your old policy, make sure to find out the specific dates when your new coverage will go into effect to ensure that there won’t be any gaps in coverage while you switch providers.
Sign and return all required paperwork promptly
To speed up the procedure, make sure all paperwork is signed and returned as soon as it is received.
You will be able to pay for the insurance in a method that is convenient for you if you purchase your gap lease or loan coverage from American Family. The cheque you get from the dealership’s insurance group can be directly applied to your current policy, or you can deposit the money and make monthly payments in its place.
Contact your American Family Insurance agent for an estimate when you are thinking about your gap insurance requirements. With a policy offered by a company you know and trust, you’ll experience more peace of mind.
Can I revoke my gap coverage?
Gap insurance is cancellable at any time, and some motorists might be eligible for a return if they never use the coverage.
If you’ve leased or financed a car, the dealership or your insurance provider likely provided you gap insurance. If your automobile is stolen or totaled, gap insurance will pay the difference between what you owe and what the car is actually worth.
There may come a time, though, when you determine that gap insurance is no longer worthwhile. Fortunately, gap insurance is optional; you can decide to discontinue it at any time.
- If your financed or leased car is totaled or stolen, gap insurance pays out your loan.
- Unlike auto insurance, gap insurance is not mandated by law, and you are free to discontinue it at any time.
- Once your loan debt is less than the actual cash value of your car, it is frequently wise to terminate your gap insurance.
- When a driver purchases gap insurance in advance, they may be eligible for a return.
- Gap insurance products are available from motor insurance companies, finance companies, and dealerships.
Considerations for Canceling Your GAP Insurance
Before we get into the specifics of requesting a GAP refund, there are a few items to consider that might influence your choice:
- Only the unused portion of your GAP insurance will be refunded to you. For instance, you will only receive a refund for the remaining nine months of coverage if you cancel your policy after three months of coverage (if you paid for a year of coverage).
- Your method of paying your insurance bill will determine how much money you get back. You cannot receive a refund if you pay monthly because you have already paid for the coverage you have already gotten. The amount of your return, if you paid for your insurance all at once, will depend on how long you had been covered at the time you canceled your policy.
- It usually takes four to six weeks to get your money after canceling your policy and requesting a refund.
- Requesting a GAP insurance refund is required. The majority of insurance firms don’t always provide them.
Instructions for Canceling Your GAP Insurance Policy
Here are the detailed instructions. The actions listed below are predicated on you purchasing GAP insurance from your insurance company rather than the car dealership. (Hint: Getting it from your insurance company will cost you far less.)
- Contact your insurance company to begin the reimbursement procedure. Inform them that you wish to terminate your GAP insurance and receive a refund for the remaining coverage, along with your name and policy number. Remember, wait to do this until after your car has been lawfully sold, traded, or paid off your loan.
- To establish that your car was traded in, sold, or that you paid off your loan early, gather the necessary documentation and mail it to your insurance company.
- Any forms that your insurance provider requires for concluding the cancellation procedure should be filled out and sent.
- Reiterate to your provider that you want a return for the unused GAP insurance coverage if anything is still unclear. Within four to six weeks of your request to cancel, the majority of insurance providers will send you a check for your return.
Can gap insurance be canceled online?
Yes. Gap insurance just isn’t worthwhile after you owe more on your loan than the real value of your car.
The good news is that when you are ready to cancel, you will be able to receive a prorated refund on your gap insurance.
Here’s how to determine when it’s OK to cancel your gap insurance policy.
Yes to canceling if:
It’s time to cancel your gap insurance policy if the remaining balance on your loan is less than the market value of your car.
If your car is totaled, there won’t be any space left to fill. You will now just be paying for additional insurance that you won’t use.
No to canceling if:
Gap insurance may be a wise purchase if you are upside down on your loan (debt more than your automobile is worth). Consider delaying cancellation until you are no longer in the negative if you don’t want to face a bill in the event that your automobile is totaled.
In general, people who lease, have less than 50% of their loan paid off, made a small down payment, or have a high interest rate on their loan would benefit most from gap insurance.
Key learnings If the balance of your loan is less than the value of the vehicle, you ought to void your GAP insurance.
How can I revoke my extended warranty and gap coverage?
Anytime you decide to cancel your extended warranty, you’ll receive a prorated refund for the period that was left on your policy. If the warranty was part of your loan, your car payment won’t change, but after the refund is taken out of your balance, you might be able to pay off the car sooner.
To make the cancellation process as simple as possible, think about the following advice:
Check the small print. For information on who to contact and whether there is a cancellation fee, locate the paperwork for your insurance. Call the finance manager who sold you the extended warranty if you just purchased it and you don’t yet receive the contract. You might need to get in touch with the business through phone or letter regarding third-party warranties.
Let’s say “no. Be aware that if you phone a warranty business, you will likely be routed to a department that is trained to persuade you to stay with them. Don’t feel like you have to explain why you’re cancelingjust keep saying it “no.
Get it down on paper. Get a copy of any cancellation forms that you might be required to fill out signed by a dealership employee. Keep copies of any pertinent paperwork, including your cancellation letter or form.
Following up To ensure that your cancellation was successful, schedule a reminder. You can speak with your lender or check your loan statement.
How long does it take to receive a refund for gap insurance?
Refunds from gap insurance often take 4-6 weeks. However, you can speed up the procedure by keeping in touch with your gap insurance provider and submitting signed documents right away.
Is gap insurance truly required?
When the balance of your auto loan or lease exceeds the value of your car at the time it is deemed a total loss, gap insurance kicks in.
Gap insurance is only worthwhile if you are leasing a car or have loan debt that is greater than the value of the vehicle.
Gap insurance won’t be necessary forever. Once your loan balance is less than the value of your car, stop paying gap insurance.
When you refinance, does your GAP insurance expire?
You refinance the loan on the car, not the gap insurance, when you refinance a car loan on a car with gap insurance coverage. This is so because the original loan was linked to the gap insurance policy, which is no longer in force once the original loan has been repaid. You’ll probably receive a partial refund if you’ve already paid in full for your gap insurance. You most likely won’t receive a refund if you were paying your gap insurance in monthly payments. To fit your new loan, you might want to get a new gap insurance coverage. Take into account the following while deciding whether you require it.
- Do you need gap insurance for your loan, first, from your new lender?
- Ask your auto insurance provider what it would pay out if your car was totaled next, if it’s not required.
- Compare that sum to the debt you have. Consider whether it makes sense to purchase a new gap insurance policy if the amount you owe is less than the value of the vehicle or if the figures are near. Is this amount, if you owe more than the car is worth, something you might manage to pay in addition to the price of getting a new car?
Can I revoke my dealership’s extended warranty?
Unfortunately, since dealers receive a commission when they offer you an extended warranty, they won’t rush to help you cancel. When you return to the dealership or make the call to cancel, it might be helpful if you have a weak constitution to have a pushy and assertive friend with you.
You must fill out a form detailing your mileage and the cancellation date in order to cancel your extended auto warranty, and you must then obtain a signed copy of the form from the dealership.
Don’t be scared to phone them every few weeks because you will likely need to prod them towards processing the request.
What occurs if you terminate the insurance on a financed vehicle?
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- When you don’t drive, you might save money by suspending or canceling your auto insurance.
- Most auto lenders won’t let you cancel or suspend your auto insurance if you financed your automobile until the loan is paid off.
- When you cancel your auto insurance, there may be a gap in coverage, which can raise your premiums in the future.
- If you revoke or suspend your insurance, your car is not insured from fire, theft, or other types of harm.
How long should gap insurance be kept?
When bought through a dealership, gap insurance is valid for the duration of the loan or lease, and when bought from a regular auto insurance provider, it is valid for the duration of the policy. Since gap insurance is useless when a car is worth more than the remaining balance on a loan or lease, it is typically only required for one to two years.
When an automobile is deemed a total loss, gap insurance covers the difference between the loan or lease sum and the car’s real cash worth. Gap insurance can save drivers from having to make payments on a car that is no longer drivable because new cars depreciate rapidly. Depreciation does, however, slow down with time, so as the automobile is paid off, the difference between the value of the vehicle and the loan or lease sum gradually vanishes.
As a result, it’s important to maintain track of your debt as well as evaluate the car’s value utilizing internet resources like Kelley Blue Book. Generally speaking, once your loan or lease payment is $1,000$2,000 less than the value of the vehicle, it makes sense to terminate gap insurance coverage.
How soon can an extended warranty be cancelled?
If you wait until beyond the deadline, you won’t be able to cancel an extended warranty. Some warranty providers place severe restrictions on how long you have to decide whether to cancel your extended warranty. Typically, this window of time is between 30 and 60 days.
If your contract doesn’t specifically specify otherwise, you should still be allowed to cancel your warranty even in this scenario. Even if you paid in full for your warranty and decide to cancel after the deadline, you should still be eligible for a prorated refund.
You might have to see your warranty through to the end of your contract if you are actually unable to cancel it.
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How much will gap insurance cover in total?
- In addition to your deductible, gap insurance covers the difference between what is owing and what the physical damage insurance provider pays: $2,000
What is loan or lease coverage and how it is different from gap coverage?
Although the terms loan/lease coverage and gap insurance are sometimes used interchangeably, they typically don’t refer to the same coverage. The actual cash value (ACV) paid out by your auto insurance company will be less the amount you still owe on a vehicle, and the gap insurance will cover the difference.
Usually, lease/loan coverage has a cap on how much it will pay out, such as 25% over the estimated ACV of your car. Your deductible is deducted from both.
Let’s say you total your $18,500 automobile with a $500 collision deductible, but you still owe $25,000 on it. There is a $6,500 discrepancy between what you owe and what the item is worth. There is a $6,000 discrepancy after your $500 deductible has been paid.
This total sum would be paid out if you had gap insurance. It would only pay $4,625 with lease/loan coverage that only pays up to 25% over the value of the vehicle (18,500 x 25% = $4,625). Therefore, if you chose the lease/loan option, you would still owing $1,375.
Run the figures to ensure that lease/loan coverage will work for you. For instance, if the car was worth $20,000 in the previous case, 25% of that amount, or $5,000, would be the difference ($25,000 payable – $20,000 paid by insurer plus your deductible = $5,000), and it would have covered the entire amount.
Suppose you purchase a car for $40,000 and have loan/lease coverage that pays 25% more than the automobile’s real cash worth. Eventually, the car loses value and is worth $25,000. After it is deemed a total loss, the maximum you might be compensated is $31,250 less the deductible.