Can I cancel gap insurance and get a refund?

Typically, you can cancel gap insurance at any time. However, your leasing company may require you to keep your gap coverage if you have a leased vehicle. You may cancel coverage for several reasons including selling your car or switching to a new gap insurance provider. You might also cancel when your loan balance is less than the car's actual cash value. You may receive a refund for your gap insurance if you've paid for your coverage upfront.

How long does it take to get a gap insurance refund?

It depends on the coverage provider. If you're canceling an auto policy with gap coverage, or gap insurance through a dealership, then you may receive a refund for any additional months of coverage for which you've already paid. If you're removing gap coverage from your auto insurance policy, then your insurer may apply a credit to your account instead, if applicable.

Three reasons you might want to cancel gap insurance

You owe less on your auto loan

Once you owe less on your car loan than what the car is worth, you generally don't need gap insurance.

To switch coverage providers

Buying gap coverage through your auto insurer may be cheaper than paying for coverage through a dealership. If your insurer offers a better deal, you can cancel your gap insurance from the dealership and add it to your auto policy instead.

You sold your car

If you sell the vehicle with gap coverage, you can remove the coverage from your auto policy. If your gap coverage was provided through a dealership, you can cancel it once your loan or lease is paid off.