How To Cancel Gap Insurance (2026)

If you recently purchased a new car, you may have had to answer a lot of questions and sign a lot of paperwork. One of the many questions you were probably asked when you purchased your car was whether you wanted to also purchase a GAP insurance policy.

GAP insurance helps to pay the difference between your vehicle’s actual value and the amount of money you owe on your car. It is especially helpful coverage to have when you purchase a new car that depreciates in value the minute you drive it off the lot.

Before you focus on how to cancel GAP insurance, you’ll want to know for sure that it makes financial sense to do so. If you are interested in switching auto insurance companies, you should shop around for coverage from multiple companies to make sure you don’t overpay for coverage.

You can use our free quote tool above to find and compare car insurance rates today and see how much you could save by switching to a different company.

Can I cancel my GAP insurance?

It is not difficult to cancel GAP insurance coverage. But before you decide to cancel your GAP insurance, you should make sure the coverage is no longer necessary.

The Insurance Information Institute (III) recommends purchasing and maintaining GAP insurance on your vehicle if one or more of the following points apply to you:

• You made less than a 20 percent down payment when you purchased your car
• You plan to finance your vehicle for 60 months or more
• You are leasing a vehicle
• You’ve purchased a car that depreciates quickly
• You’ve incorporated negative equity from an old car loan into a new loan

If you have financed your new car and you owe more on it than it is currently worth, GAP insurance is truly a necessity. Otherwise, you could end up paying thousands of dollars out of your own pocket if your car is totaled without GAP insurance.

Read more: Affordable No-Down-Payment Auto Insurance

But even if you find that you are in need of GAP coverage, you could end up paying too much for it. This is especially true if you purchase your GAP coverage through a dealership. Instead, you should shop around online and find car insurance companies that provide GAP insurance for a reasonable price.

There are some times when it’s appropriate to cancel your GAP insurance coverage. These situations include:

• If you overpaid for GAP coverage when you purchased your car
• If the loan you currently have on your car is less than the actual value of your car
• If you sold your car or paid off your car loan
• If you need to cut down on insurance premiums

If one of the situations above applies to you, it may be in your best interest to cancel your GAP insurance coverage. You will have to follow a few steps in order to make sure you handle the cancelation of your coverage in the best possible way.

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How long does GAP insurance last?

GAP insurance coverage can last anywhere from one year to five years, depending on the type of policy you purchase. Most GAP insurance loans are slated for 12-24 months. Because the length of your GAP insurance coverage may exceed the amount of time you actually need the coverage, there’s a chance you’ll have to cancel your GAP coverage before it expires.

To cancel your GAP insurance, you will have to follow the specific rules of your lender. If you purchased GAP coverage from a dealership, you would need to reach out to the dealership to ask about canceling your coverage. If your GAP insurance is through your car insurance company, you’ll need to read your policy terms.

Next, you will need to request the proper cancellation forms. Some companies may allow you to do all of this online, but that depends on your insurance carrier.

Once you’ve filled out the proper forms, you may need to submit one or more of the following documents to finalize the cancellation of your GAP coverage:

• Refund forms
• Odometer disclosure form
• Proof of sale (if you’ve sold or traded your car)
• Proof of paying off your vehicle

If you paid for your GAP coverage in full, you might be eligible for a partial refund of the policy. Again, this will depend on your specific GAP coverage. You should be able to ask a representative from your insurance company if you have any questions.

Read More: Do I get my GAP insurance money back after I pay off my car?

Should I cancel my GAP insurance?

The only way to know whether you should cancel your GAP coverage is to know your specific situation. If you no longer owe more on your car than it’s actually worth, GAP coverage will do you no good. So there’s no point in keeping the policy — especially if you continue to pay monthly premiums for it.

But you need to make sure your car insurance is adequate before you make any changes to your policy. To do this, you can shop around online to find and compare car insurance rates from the best companies in your area. This will help you make sure you have the proper coverage at an affordable rate.

In fact, you can use our free quote tool below to find and compare car insurance rates from top companies near you today.