What GAP insurance does
If your car is written off or stolen, your car insurer usually pays its current market value. GAP (guaranteed asset protection) insurance can cover the difference between that payout and what you still owe on finance, or what you paid for the car, depending on the policy.
When GAP is added to your finance, you borrow its cost too and pay interest on it. This calculator shows that effect.
Worked example
Financing £18,000 at 8% over 48 months costs £439.43 a month. Adding a £300 GAP policy to the loan raises the payment to £446.76 a month and the total repaid to £21,444.31.
Interest is worked out monthly at one twelfth of the annual rate. Lenders may calculate interest differently (some charge it daily), so your actual payments can differ slightly.
Shop around
You don't have to buy GAP insurance from the dealer, and paying for it separately avoids paying interest on it. Compare policies before deciding.
Inputs for the auto loan calculator with GAP insurance
Car price
The price of the car.
Deposit
What you're paying upfront.
Interest rate (per year)
The annual interest rate on your finance. The rate shown is only an example, so enter the rate from your quote.
Term
How many months you'll repay over.
GAP insurance cost
The price of the GAP policy if you add it to the finance. Enter 0 to see the loan without it.
CALCULATOR QUESTIONS
Auto loan calculator with GAP insurance questions
What is GAP insurance?
Cover for the difference between your insurer's payout if the car is written off or stolen and what you owe or paid, depending on the policy.
Should I add GAP to my finance?
Adding it means paying interest on it. Paying separately is cheaper if you can.
Do I have to buy GAP from the dealer?
No. You can buy it from other providers.
Is GAP insurance compulsory?
No. It's optional cover.