How Much Does Gap Insurance Cost in New York?

If you finance or lease a new car, gap insurance can provide financial protection in case the vehicle is totaled or stolen. But how much does gap insurance cost in New York?

The cost of gap insurance in New York averages $2 to $30 per month, depending on where you buy it. However, gap insurance is only needed for the first few years of your loan or lease until the car’s value exceeds the amount owed.

Below we’ll explore gap insurance pricing in more detail, including:

• What is gap insurance?
• How gap insurance works in NY
• Average cost by provider
• What impacts the price
• Is gap insurance worth it?

What is Gap Insurance?

Gap insurance, also known as guaranteed asset protection (GAP) insurance, covers the “gap” between what your car insurance pays if the vehicle is totaled and what you still owe on the loan or lease.

For example, if you owe $15,000 on your car loan but the vehicle is only worth $10,000 at the time of a total loss, your insurer will only pay the $10,000 actual cash value (ACV). Gap insurance covers the remaining $5,000 balance so you don’t end up owing money on a car you no longer have.

Gap insurance is optional but often required if you lease a vehicle or finance with little money down. It protects against depreciation and ensures you don’t end up “upside down” on your loan.

How Much Does Gap Insurance Cost in NY?

The cost of gap insurance in New York depends on where you purchase coverage:

• From auto manufacturer: $200 – $700 total
• From dealership/lender: $200 – $700 total
• Added to existing car insurance policy: $20 – $40 per year
• Average monthly cost: $2 – $30

Buying gap insurance from your insurance company tends to be cheapest at around $2 – $5 per month. Getting it from the dealer when you purchase the car is often most expensive.

Major insurance companies that offer gap insurance in New York include:

• Progressive
• Allstate
• Liberty Mutual
• Nationwide
• Travelers

The cost is also influenced by the value of your vehicle and size of your loan, which determines the maximum payout gap insurance would provide. More expensive cars typically cost more to insure.

What Impacts the Cost of Gap Insurance?

The main factors that affect gap insurance pricing in New York include:

• Vehicle value – More expensive cars have higher gap insurance costs
• Loan/lease amount – The higher your balance, the higher the gap insurance cost
• Loan term – Longer loan terms mean higher gap insurance prices

Other factors like your age, driving history, and credit score can also impact your rates. Higher risk drivers generally pay more for gap insurance.

Is Gap Insurance Worth It in NY?

Whether gap insurance makes sense depends on your down payment, loan term, and the car’s depreciation rate. Here are some scenarios where gap insurance has high value in New York:

• You make a low down payment of less than 20%
• You take out a long-term loan of 5-6 years
• You lease a vehicle
• Your car depreciates quickly (luxury/sports cars)

Conversely, gap insurance provides less value if:

• You make a large down payment
• Your loan term is short (3 years or less)
• You drive a vehicle that holds value well

You only need gap insurance until the car’s value is greater than the loan balance. For most drivers this is 1-3 years.

The peace of mind gap insurance provides often makes it worth the small monthly cost, especially when you owe significantly more than the car is worth. But crunch the numbers for your situation to determine if gap coverage fits your needs.

Does NY Require Gap Insurance?

New York state law does not require gap insurance. But many lenders and lease companies mandate it for financed vehicles. Always check your loan or lease documentation to see if gap coverage is stipulated.

If not required, gap insurance can still be a smart idea depending on your down payment amount and loan/lease terms. It provides valuable protection against depreciation and outstanding loan balances.

Buying Gap Insurance in New York

If you decide gap coverage is right for you, here are some tips for purchasing a policy in NY:

• Compare quotes from your insurance company and auto manufacturer.
• Ask the dealer for gap insurance pricing if you’re financing through them.
• Consider standalone gap insurance if your insurer doesn’t offer it.
• Buy within 30 days of getting your car to qualify for the best rates.
• Make sure you understand cancellation policies if you cancel early.

Shop around to find the best gap insurance rates in New York for your situation. Getting quotes from several providers can save you hundreds per year.

Is Gap Insurance Required with Full Coverage?

Full coverage auto insurance (combining comprehensive and collision coverage) does not include gap insurance in New York. Lenders may require you to add gap even if you have full coverage.

Full coverage only pays to repair or replace your vehicle up to its current value. Gap insurance pays the remainder of what you owe if the vehicle is totaled.

So gap insurance provides protection full coverage does not. If you have an outstanding loan or lease, gap coverage can give you peace of mind despite having a full coverage policy.

The Bottom Line

The average cost of gap insurance in New York ranges from $2 to $30 per month based on your provider. While not required by law, gap insurance can be a lifesaver if you owe more on your loan than the vehicle’s value after an accident. Carefully consider if it makes financial sense for your situation.