Gap Insurance Refund

There are many things you need to consider when purchasing a new car in Stephenville. On top of the required liability insurance, it may be worth considering additional gap insurance. As a benefit, if you pay off your car loan ahead of schedule, you may be able to enjoy extra money in your pocket. Although required liability insurance continues after your car loan is paid off, a gap insurance refund is possible. Learn how gap insurance refunds work with Bayer Auto Group.

What Is Gap Insurance?

You may already know that cars experience depreciation after you purchase a new car. That means, when you leave a Brownwood-area lot with a new car loan, there could be a period where you owe more on the vehicle than it’s worth. In the event of an accident where your vehicle is totaled, standard insurance coverage only pays out what the vehicle is worth. The standard coverage doesn’t factor in the money you may still owe on an auto loan for the vehicle you can no longer operate. Gap insurance is helpful because it covers the gap between the cash value traditional insurance pays out and the remaining amount on your loan. Learn more about what gap insurance covers with the Bayer Auto Group finance team. 

How Does a Gap Insurance Refund Work?

While it’s not possible to get a total gap insurance refund after your loan is complete, you can get a partial sum back. So, how does a gap insurance refund work?

• Lump Sum Payment: If you’re able to pay off the gap insurance refund in advance, you’re qualified for a refund on the remaining portion of the policy. 
• Monthly Payments: If monthly payments are more comfortable, you aren’t entitled to a refund on the previous months. However, you may get a small refund if you cancel early in the month. 

How to Cancel Gap Insurance

If you have the proper paperwork in hand, canceling gap insurance is a relatively simple process. Start by contacting your gap insurance provider to begin the cancellation process and be ready to present the following documentation: 

• Gap insurance cancelation forms
• Copy of an odometer disclosure statement
• Copy of auto loan payoff showing the date your vehicle was paid off

Once the proper paperwork has been processed, you’ll be issued a gap insurance refund for the remaining portion of the policy. 

Explore Your Coverage Options with Bayer Auto Group!

Our finance team is ready to guide you through the car-buying process and your insurance options. Contact us if you have questions about your gap insurance refund and learn more about coverage requirements when purchasing a used car around Abilene.