Gap Coverage Calculator comparing your loan payoff with the car’s value, showing what full gap or 25% loan/lease payoff covers, and the month your loan drops below the car’s worth.
Use the payoff amount from your lender and a private-party value for the car. Collision insurance pays the car’s value, not what you owe.
Loan Timeline and Gap Prices
Some gap contracts also pay your deductible, depending on the policy and the state. The rest sets when the loan drops below the car’s value.
Loan vs Car Value, Year by Year
| When | Loan Balance | Car Value | Gap |
|---|---|---|---|
| Today | $32,000 | $25,000 | $7,000 Upside Down |
| Year 1 | $26,461 | $20,616 | $5,845 Upside Down |
| Year 2 | $20,521 | $17,523 | $2,998 Upside Down |
| Year 3 | $14,152 | $14,895 | Covered |
| Year 4 | $7,323 | $12,661 | Covered |
| Year 5 | $0 | $10,761 | Covered |
Gap Coverage Calculator for Car Loans and Leases
The Gap Coverage Calculator shows how much of your loan or lease would be left unpaid if the car were totaled today, and what each type of gap coverage would pay toward it. It also projects when the loan will fall below the car’s value, so you know how long coverage is worth keeping. Drivers use it when a dealer offers gap at signing, and again a year or two later to decide whether to cancel.
Enter the payoff amount from your lender, the car’s current value, your collision deductible and the type of gap coverage you have. The second panel adds the APR, months left, the car’s age, any negative equity rolled in from a trade, and the prices of dealer and insurer gap. All figures are in US dollars.
How Big the Gap Is Today
Progressive explains that after a total loss, collision or comprehensive coverage pays the car’s actual cash value minus your deductible. Gap coverage then pays some or all of the difference between that value and what you still owe.
$$\text{Gap} = \text{Loan balance} – \text{Actual cash value}$$
$$\text{Owed without gap} = \text{Loan balance} – (\text{ACV} – \text{Deductible})$$
The default loan is $32,000 on a car worth $25,000, with a $500 deductible. The gap is $7,000, and without coverage you would still owe $7,500 after the insurance check. At a $634 monthly payment, that is almost 12 more payments on a car you no longer have.
Full Gap Versus Loan/Lease Payoff
Not every product called gap pays the full difference. Progressive sells loan/lease payoff coverage, which pays the difference up to 25% of the car’s value, with the exact limit varying by state. WalletHub adds that it does not pay your deductible or any balance rolled over from a previous loan.
| Coverage on the default loan | Coverage pays | You still owe |
|---|---|---|
| Full gap insurance | $7,000 | Up to the $500 deductible |
| Loan/lease payoff, 25% cap | $6,250 | $1,250 |
| No gap coverage | $0 | $7,500 |
The 25% cap matters most on large loans. MoneyGeek works an example of a $45,000 loan on a $32,000 car, where the cap pays $8,000 and leaves $5,000 still owed. Full gap policies have limits too, since Protective Asset Protection notes some contracts exclude any debt above 125% or 150% of the car’s value at purchase.
Rolled-in negative equity is another balance some policies leave out. When you enter it, the loan/lease payoff option leaves that amount out of the payout, and the calculator warns you to check whether a full gap policy covers it. Whether a full gap policy also pays your deductible depends on the contract and the state.
When Gap Coverage Stops Paying for Itself
Gap coverage is only useful while the loan is higher than the car’s value. The calculator runs the loan balance forward month by month against a car that loses about 20% in its first year and 15% a year after that, the rule of thumb from Money Guy’s car buying guide.
For the default six-month-old car on a 60-month loan at 7%, the gap peaks at about $7,016 two months from now. It then shrinks, and the loan falls below the car’s value after about 2 years and 10 months. The year-by-year table shows both lines, so you can set a reminder to cancel at the crossing.
A larger down payment or a shorter loan moves that date much closer, which is what the 20/4/10 Rule Calculator is built to check before you buy. Tax and fees financed into the loan push it further away, and the out-the-door price calculator shows how much of those you would be borrowing.
Dealer Gap or Insurer Gap
The CFPB notes that dealer gap is usually rolled into the loan, so you pay interest on it, and that its price varies widely. CarInsurance.com puts gap added through an insurer at about $89 a year, or $7 a month.
With the default $600 dealer price financed at 7% over 60 months, the dealer policy costs about $713. Insurer gap at $89 a year, kept only until the gap closes, costs about $252. That is roughly $461 saved, and the insurer policy can simply be dropped when it is no longer needed.
If you are told gap is required to get the loan, the CFPB suggests asking where the sales contract says so. When it is truly required, its cost must be included in the disclosed APR. When it is optional, you can decline it and buy coverage from your insurer instead.
Gap Coverage Questions
Is gap insurance worth it?
It is worth it while you owe more than the car is worth. Insurance.com lists the usual cases as putting less than 20% down, rolling negative equity into the loan, financing for more than 60 months, or leasing. CarEdge CEO Zack Shefska told the site that a new car often loses 15% to 20% of its value as soon as it leaves the lot.
If the loan already sits below the car’s value, gap coverage pays nothing. The calculator shows that case as equity with no gap, and it also checks whether a larger gap is still ahead before you cancel.
Can I get a refund on gap insurance?
Usually, if the loan ends early. The CFPB says you may be entitled to a refund if you sell, refinance or pay off the loan early, and that you can cancel optional add-ons like gap at any time. Ask the lender, the gap provider or the dealer if you no longer have the paperwork.
Some states enforce this closely. The Colorado Attorney General requires lenders to refund unused gap fees automatically after an early payoff or repossession. Its office secured more than $9.5 million in refunds from Wells Fargo for failing to return them.
What happens if my car is totaled and I have no gap coverage?
The insurer pays the lender the car’s value minus your deductible, and you keep paying the rest of the loan. In the default case that is $7,500 on a car you can no longer drive, which is why the calculator flags a missing policy in red.
To see what the insurance payout itself would be, including any tax and fees your state requires, the Total Loss Calculator works it out from the repair estimate and the car’s value. Put that payout in as the car’s value here to see the exact balance left on the loan.