GAP Coverage Calculator
Determine if GAP insurance is worth it for your vehicle
Results
What Is GAP Coverage?
GAP stands for Guaranteed Asset Protection.
When a car is totaled, standard auto insurance pays the actual cash value of the vehicle, not what you owe on your loan. Because cars lose value fast, the loan balance can be higher than the car’s value, especially in the first few years.
That difference is called a gap.
GAP coverage pays that gap so you are not stuck paying for a car you no longer have.
Why a GAP Coverage Calculator Matters
Many people buy GAP insurance without knowing if they really need it. Others skip it and regret it later.
A GAP Coverage Calculator removes the guesswork by estimating:
- How fast your car loses value
- How your loan balance drops over time
- When the gap is largest
- Whether the cost of GAP coverage makes sense for your situation
This calculator is especially useful for:
- Long loan terms (60 to 84 months)
- Small or no down payment
- New vehicles
- High annual mileage
How This GAP Coverage Calculator Works
This calculator uses real-world factors, not rough guesses. It looks at both loan math and vehicle depreciation month by month.
Here is what it calculates behind the scenes:
- Your monthly loan payment
- Remaining loan balance each month
- Vehicle value after depreciation
- The gap between those two numbers
- The month when the gap is highest
- Whether GAP coverage is worth its cost
Breakdown of Each Calculator Input
Vehicle Purchase Price
This is the full price of the vehicle before insurance, interest, or GAP coverage.
Why it matters:
It sets the starting value for depreciation and loan-to-value calculations.
Down Payment
Money you paid upfront.
Why it matters:
A larger down payment lowers your loan balance and reduces GAP risk right away.
Vehicle Type
Options include new and used sedans, SUVs, trucks, luxury cars, and electric vehicles.
Why it matters:
Different vehicles lose value at different speeds. Luxury and electric vehicles usually depreciate faster.
Loan Amount
The total amount financed.
Why it matters:
This is the number your loan balance starts from. Higher loan amounts increase GAP risk.
Interest Rate
Your annual loan interest rate.
Why it matters:
Higher rates slow down how fast your balance drops, which keeps the gap open longer.
Loan Term
From 36 to 84 months.
Why it matters:
Longer loans mean slower equity build-up and higher GAP risk.
Loan Start Date
The date your loan began.
Why it matters:
It helps align depreciation and loan payoff timelines.
Annual Mileage
Mileage ranges adjust depreciation speed.
Why it matters:
More miles usually mean faster loss of value.
GAP Coverage Cost
What you would pay for GAP insurance.
Why it matters:
The calculator compares this cost to your maximum potential gap.
GAP Coverage Term
How long the GAP coverage lasts.
Why it matters:
Coverage should last until you are no longer upside down on the loan.
Insurance Deductible
Your auto insurance deductible.
Why it matters:
Higher deductibles increase out-of-pocket loss, making GAP coverage more valuable.
Understanding the Results
Once you click Calculate GAP Analysis, the results section explains everything clearly.
Loan-to-Value Ratio (LTV)
This shows how much you owe compared to what the car cost.
- Above 95%: very high risk
- 90–95%: high risk
- 80–90%: moderate risk
- Below 80%: lower risk
Monthly Payment and Total Interest
These help you see the real cost of your loan over time.
Maximum Potential Gap
This is the most important number.
It shows the largest dollar difference between:
- What you owe
- What the car is worth
This usually happens early in the loan.
Month of Maximum Gap
Tells you when you are most exposed to loss.
Break-Even Point
The point where the car’s value becomes higher than the loan balance.
After this point, GAP coverage is usually unnecessary.
Risk Level
A clear summary based on your loan-to-value ratio and depreciation risk.
Recommendation
The calculator gives a direct answer:
- Whether GAP coverage is likely worth the cost
- Why that recommendation makes sense
When GAP Coverage Is Usually Worth It
GAP coverage often makes sense if:
- You made a small down payment
- You chose a long loan term
- The vehicle depreciates quickly
- You drive more than average miles
- Your insurance deductible is high
When GAP Coverage May Not Be Needed
You may not need GAP coverage if:
- You put a large amount down
- Your loan term is short
- The vehicle holds value well
- You reach the break-even point quickly
Important Notes About Accuracy
This calculator uses realistic depreciation estimates and standard loan formulas. Still, real-world results can vary due to:
- Market conditions
- Vehicle condition
- Regional demand
- Early loan payoff
Think of the results as a decision tool, not a guarantee.
Quick Navigation
