How to Cancel Your Toyota GAP Insurance Policy

GAP insurance, which stands for Guaranteed Asset Protection insurance, is an optional add-on that you may have purchased when financing or leasing your Toyota vehicle. GAP insurance helps pay the difference between what your auto insurance pays if your car is totaled or stolen and what you still owe on your loan or lease.

While GAP insurance can provide peace of mind in case your Toyota is totaled or stolen, you may decide you want to cancel the policy if you no longer need the protection. Here’s what you need to know about canceling Toyota GAP insurance and getting a refund.

What Is Toyota GAP Insurance?

Toyota GAP insurance, which is administered by Toyota Financial Services, pays the difference between your car’s actual cash value and the remaining balance on your auto loan or lease if your car is totaled or stolen.

For example, let’s say you financed a new Toyota Camry for $25,000. After a year, your Camry is totaled in an accident. Your auto insurance company determines the actual cash value of your 1-year-old Camry is $18,000. But you still owe $22,000 on your loan. Your auto insurance will only pay the $18,000 actual cash value, leaving you with a $4,000 gap between what your insurance paid and what you owe. This is where GAP insurance would step in to cover the $4,000 difference.

GAP insurance protects you from owing money on a vehicle you no longer have. It’s an optional add-on product offered by Toyota dealers when you purchase or lease a new Toyota vehicle. The cost is typically a few hundred dollars rolled into your auto loan or lease payments.

Reasons to Cancel Your Toyota GAP Insurance

While GAP insurance can provide valuable protection, here are some common reasons you may want to cancel your policy:

• You paid down your loan balance – If you’ve paid down your auto loan significantly, you may no longer need GAP protection. Once your loan balance is less than your car’s value, standard auto insurance should be sufficient.

• You refinanced for a lower rate – When you refinance your auto loan, your GAP policy does not transfer to the new loan. You’ll have to purchase GAP again for the refinanced loan, so you may want to cancel the old policy.

• You’re nearing the end of your loan term – GAP insurance makes the most sense in the first few years of an auto loan when depreciation causes the largest gap between vehicle value and loan balance. As you near the end of your loan, it’s less likely you’ll need GAP.

• You sold your Toyota vehicle – If you sold your Toyota and no longer have a loan or lease, you obviously no longer need GAP protection. Be sure to cancel any active policy.

• You want to reduce monthly expenses – Eliminating the cost of GAP insurance can help free up room in your monthly budget. Just be sure you can afford the risk of the loan gap if you cancel early in your loan term.

No matter what the reason, canceling your Toyota GAP insurance may entitle you to a partial refund if you cancel mid-term. Here’s how to cancel GAP and get a refund from Toyota.

How to Cancel Toyota GAP Insurance

Cancelling your Toyota GAP insurance policy is easy if you know the right steps. Here is the cancellation process:

Step 1: Call Toyota Financial Services

Toyota Financial Services administers all Toyota GAP policies. To cancel, you simply need to call their customer service line at 1-800-874-8822.

Let the representative know you want to cancel your GAP insurance policy along with your account information and the VIN number of your Toyota vehicle. Be ready to provide a reason for cancellation.

Step 2: Complete the Toyota GAP Cancellation Form

After starting the cancellation request, Toyota will mail you a Toyota GAP Contract Cancellation Request Form. It will arrive within 7-10 business days.

You’ll need to fully complete and sign this cancellation form. Required information includes:

• Your full name
• Toyota GAP contract number
• Reason for cancellation
• Your signature and date

Mail the signed cancellation form back to Toyota using the address provided:

Toyota Financial Services
GAP Contract Cancellations
P.O. Box 9786
Cedar Rapids, IA 52409-0004

To expedite processing, you can also fax the completed form to 1-800-874-7059.

Step 3: Receive Your Refund

Once Toyota Financial Services receives your cancellation form, they will process the cancellation and issue you a prorated refund check within 60 days. The refund amount will depend on when you cancel:

• Within 30 days – Full refund
• 31-90 days – 75% refund
• After 90 days – 50% refund

You can expect to receive your refund check in the mail. Be sure to cash it promptly. Once cashed, your GAP policy will be considered canceled.

And that’s it! Following these three simple steps allows you to smoothly cancel your Toyota GAP insurance policy.

Toyota GAP Insurance Cancellation Form

To officially cancel your Toyota GAP policy mid-term, you’ll need to complete the Toyota GAP Contract Cancellation Request Form.

Here’s what the Toyota cancellation form looks like and the key sections it contains:

The cancellation form will come directly from Toyota Financial Services with your specific policy details pre-filled. But in general, it contains:

• Contract Holder Information – Your name, address, phone number, and Toyota GAP contract number.
• Reason for Cancellation – Check the box to indicate why you are cancelling GAP protection. Common reasons include paying off your loan, selling your vehicle, or no longer needing/wanting coverage.
• Vehicle Information – Your VIN number, make/model, mileage, and date of policy purchase. Toyota uses this to calculate your refund.
• Signature – Sign and date the bottom of the form to make it official. Print your name as well.
• Mailing Address – The form includes the address you must mail it back to for processing. Make sure to keep a copy for your records.

Filling out every section accurately and mailing it back promptly will help ensure quick processing of your GAP cancellation and refund.

Getting a Refund After Cancellation

One benefit of canceling your Toyota GAP insurance mid-term is you are eligible for a prorated refund. This allows you to recover a portion of the premiums you paid.

Here are some key things to know about GAP refunds:

• Refunds are based on elapsed time, not vehicle mileage.
• You must request cancellation – refunds are not automatic if you simply stop paying.
• Refunds are issued within 60 days of Toyota receiving your cancellation form.
• Refunds are prorated based on standard percentages: – 100% refund if canceled within 30 days – 75% refund if canceled 31-90 days from purchase date – 50% refund if canceled after 90 days
• Refunds are returned in the form of a check mailed to your address. Cash the check promptly or it may expire.
• No refunds are issued after 36 months from your original purchase date.
• Refunds are calculated from the policy purchase date, not when your loan/lease began.

As long as you cancel within 36 months, you should get back a meaningful portion of your GAP premium. Just don’t expect a full refund unless you cancel very quickly.

Alternatives to Canceling Your GAP Policy

While canceling your GAP insurance is an option, make sure you’ve considered these alternatives which allow you to keep valuable protection:

Pay Off Your Loan Faster

If your only reason for cancelling is you’ve paid down your auto loan balance, consider sticking with the policy but paying extra each month to get debt-free faster. This minimizes the time you need GAP protection.

Update Your Policy Limits

You likely selected your original GAP policy limit and term to match your auto loan length. If you’ve paid down your loan balance, call Toyota to reduce your limits to better match your new loan amount and remaining term. This will lower your premiums.

Transfer Your Policy to a Replacement Vehicle

Did you trade in your Toyota for a new model? In most cases you can transfer your existing GAP policy to the new vehicle loan for a small fee, avoiding cancellation.

Don’t Cancel if High Risk of Loss

Be careful canceling GAP insurance if you have a long daily commute, live in an area prone to accidents or theft, or have a high loan balance relative to your car’s value. The risk of a total loss may still justify keeping GAP protection.