Thinking about adding GAP insurance to your auto policy? You’re not alone — and for good reason. GAP (Guaranteed Asset Protection) insurance can save you thousands if your car is totaled or stolen while you still owe money on it. But how much does GAP insurance actually cost, and does the price vary depending on where you live?
In this article, we’ll break down the average cost of GAP insurance in the U.S., explore the key factors that influence its price, and provide a state-by-state overview to help you make an informed decision in 2025.
What Is GAP Insurance?
GAP insurance covers the difference between your car’s current market value and what you still owe on your loan or lease. This is especially useful during the first few years of ownership when depreciation outpaces loan repayment.
Average Cost of GAP Insurance in the U.S.
On average, GAP insurance costs between $300 and $700 as a one-time fee when purchased through a dealership. If you add it to your existing auto insurance policy, it’s typically much cheaper — around $20 to $40 per year.
Cost Breakdown by Provider:
- Dealership: $300–$700 (upfront fee)
- Car Insurance Company: $20–$40 per year
- Third-Party Providers: Varies, often $200–$400 total
Factors That Affect GAP Insurance Pricing
Several variables can influence how much you’ll pay for GAP insurance:
- State of residence – Local insurance regulations affect pricing.
- Loan amount – Higher loans often mean higher premiums.
- Vehicle type – Expensive or high-depreciation cars cost more to insure.
- Purchase method – Buying from a dealership is usually more expensive than adding to your insurer’s policy.
GAP Insurance Cost by State (Estimated)
| State | Average Annual Cost |
|---|---|
| California | $40–$50 |
| Texas | $35–$45 |
| Florida | $38–$48 |
| New York | $42–$52 |
| Illinois | $30–$40 |
| Georgia | $32–$42 |
| Ohio | $28–$38 |
| Arizona | $36–$46 |
| Michigan | $45–$55 |
| North Carolina | $30–$40 |
Note: These are estimates based on insurer data and can vary depending on vehicle, loan, and provider.
Is GAP Insurance Worth the Cost?
If your car is financed or leased and you’re early in your loan term, GAP insurance is a smart investment. The cost is relatively low compared to the potential savings if your car is totaled or stolen and your loan balance exceeds the payout.
Tips for Getting the Best Price
- Get quotes from your auto insurer before buying from a dealership.
- Only keep GAP insurance while your loan balance exceeds the car’s value.
- Ask about bundling it with your existing policy for discounts.
Final Thoughts
GAP insurance doesn’t have to be expensive — and in the right situation, it can be a financial lifesaver. Understanding how much GAP insurance costs in your state helps you make smarter coverage choices. Shop around, compare offers, and protect your investment wisely in 2025.
