GAP Insurance Refunds

 
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When you purchase a new Hyundai, you may consider adding the optional gap insurance coverage along with your required liability coverage. The good news is: if you pay your car loan off early, you may be able to enjoy a little extra money in your pocket. While a refund is not available for the required liability coverage, and it will be something you have to continue to hold and pay for after your vehicle is paid off, it is possible to get a refund on your gap insurance policy. Learn more about gap insurance refunds below!

What is Gap Insurance?

When you purchase a new vehicle in Oakville, the car experiences depreciation, meaning a drop in cash value. This means if you take out an auto loan, there could be a period of time where you owe more on your vehicle than it is worth. If you experience an accident during that time, and your vehicle is totalled, a traditional insurance company will only pay out on the cash value your car is worth. This can leave borrowers owing money on an auto loan for a vehicle they no longer drive. Gap insurance is designed to cover the gap between the cash value traditional insurance pays out and the amount owed on the loan. 

How Does a Gap Insurance Refund Work?

While you won't get a full refund on your gap insurance policy once your car is paid off, you can get a portion back. How a gap insurance refund works depends on how you go about paying off your auto loan:

  • Lump Sum Payment: By paying off the gap insurance refund policy in advance, you are then entitled to a refund on the unused portion. 
  • Monthly Payments: If you pay your premiums monthly, you won't be able to get a refund on any past months. However, you may get a small refund if you cancel early in the month. 

Gap Insurance Cancellation

Getting your gap insurance refund is relatively easy, but will require you to have the right paperwork at the ready. Contact your gap insurance provider to begin the cancellation process, and be ready to submit the following: 

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

Once submitted, you should be entitled to a gap insurance refund for whatever portion of the policy hasn't been used. 

Answer Your Finance Questions at Suntrup Hyundai South

When you're looking for financial advice and car buying tips, the representatives at Suntrup Hyundai South are here to help. Visit our finance center to discuss your auto financing and insurance questions today!