What Does Toyota GAP Insurance Cover?

Guaranteed Auto Protection (GAP) insurance offered by Toyota Financial Services is an optional insurance policy that can protect Toyota owners from large out-of-pocket costs if their vehicle is declared a total loss. This article will explain what GAP coverage is, who can benefit from it, what it covers, how much it costs, and how to purchase it from Toyota.

What is GAP Insurance?

GAP insurance, which stands for Guaranteed Auto Protection, is designed to pay the difference between the actual cash value of your vehicle and the amount still owed on your auto loan or lease if your car is declared a total loss due to an accident, theft, or natural disaster.

For example, if you owe $15,000 on your car loan but your insurance company only pays out $12,000 for your totaled vehicle, GAP insurance will cover the $3,000 difference so you don’t end up owing money on a vehicle you no longer have.

GAP insurance is considered an add-on or supplemental auto insurance policy, not a replacement for traditional car insurance. It works together with your regular car insurance to provide more complete protection.

Who Can Benefit from GAP Insurance?

There are several situations where GAP insurance can be extremely valuable for Toyota owners:

  • You have a high loan-to-value ratio – If you made a very low down payment or rolled negative equity from a trade-in into your auto loan, you are more likely to find yourself “upside down” on the loan (owing more than the car is worth) later on. GAP protects against this.

  • You have a long auto loan term – The longer the loan term, the slower you build equity and the more likely you are to owe more than the depreciated car value if totaled early on. GAP shields against lingering loan balances.

  • You leased your Toyota – With a lease, you have very little or no equity at all in the vehicle. GAP insurance is almost a must with leasing to avoid being on the hook for sizable remaining payments.

  • You drive a lot of miles – High mileage accelerates depreciation, increasing the likelihood of a total loss claim settlement coming up short of the amount still owed. GAP steps in to cover the difference.

  • You have poor credit – Lower credit scores often require larger down payments and higher interest rates, which can prolong the upside-down portion of an auto loan. GAP provides a safety net.

What Does Toyota GAP Insurance Cover?

Toyota’s GAP plan has several valuable coverages in the event of a total loss, including:

  • Remaining loan/lease balance – Primary GAP benefit is paying the difference between insurance settlement and remaining loan or lease payoff amount (excluding certain fees and charges).

  • Insurance deductible – Covers up to $1,000 of your auto insurance deductible, if allowed by state law.

  • Down payment – Refunds up to $1,000 of your original down payment or cash you put into the lease.

  • Lease pull-ahead payments – Covers up to two lease payments in situations where you want to pull ahead to start a new Toyota lease.

There are also some additional perks provided by Toyota GAP:

  • Coverage for $1,000 in modifications, accessories, or damage repairs
  • Payment for sales taxes on the remaining lease/loan balance
  • 24-hour roadside assistance for 1 year
  • Towing reimbursement up to $500
  • Rental car reimbursement for 5 days at $30 per day

How Much Does Toyota GAP Insurance Cost?

The cost of GAP insurance from Toyota will depend on your vehicle, loan/lease amount, and state. On average, GAP coverage costs $500 – $800 if purchased upfront as an add-on through your dealer when buying or leasing a new Toyota.

GAP insurance is a one-time cost that provides protection for the full term of your loan or lease. There are no deductibles or out-of-pocket costs if you need to file a GAP claim later on.

How to Get Toyota GAP Insurance

To get GAP coverage for your Toyota, you must purchase it at the time of sale or lease. It is not available as a stand-alone policy later on. Here are some tips for purchasing GAP when getting a new Toyota:

  • Discuss GAP with your Toyota salesperson or finance manager during the buying/leasing process.

  • Add GAP to your sales contract or lease agreement to lock in coverage.

  • Provide accurate loan and value information for proper GAP policy limits.

  • Review GAP costs rolled into financing to avoid duplicate charges.

  • Verify GAP documents show the coverage you agreed to.

Toyota also offers GapPlus which combines GAP insurance with an extended auto warranty for added peace of mind. Inquire about this upgraded option for even more protection.

Can You Cancel GAP Insurance?

Yes, Toyota GAP coverage can be cancelled at any time if you decide you no longer want or need it. However, you will not receive a full refund as Toyota GAP fees are paid upfront at the time of purchase.

Cancellation refunds are calculated pro-rata, meaning the portion of remaining, unused coverage time will be refunded from the date of cancellation. Be sure to discuss cancellation policies with your dealer upfront.

Does Insurance Cover GAP?

Unfortunately, GAP insurance is not something included in standard auto insurance policies. Primary insurance is designed to cover the actual cash value of your vehicle, not remaining loan balances or lease payoffs.

GAP fills this concerning coverage gap to protect Toyota owners from the worst-case outcome of winding up owing on a vehicle that has been totaled. It provides valuable extra peace of mind.

Why Choose Toyota GAP Insurance?

There are many good reasons to consider GAP coverage from Toyota Financial Services:

  • Direct financing allows easy GAP purchase at the dealership

  • Coverage fits perfectly with Toyota leases and auto loans

  • Designed specifically for Toyota vehicles and owners

  • Reputable company with long history in auto financing

  • Refunds down payment which many GAP plans do not

  • Includes extras like rental car reimbursement

  • Cancelable at any time if you change your mind

  • Convenient to bundle into your Toyota sale or lease payment

The Bottom Line

GAP insurance provides vital protection against outstanding auto loan and lease balances if your Toyota is declared a total loss after an accident, theft, or natural disaster. While not mandatory, GAP coverage gives Toyota owners valuable peace of mind and financial security in case of the worst.

Toyota’s GAP plan has competitive pricing and several included perks you may not find from other providers. Just be sure to add GAP at the time of your original Toyota purchase or lease for this important protection.

GAP Insurance explained with Metro Toyota #TipswithRyan


What exactly does gap insurance cover?

What Does Gap Insurance Cover? Gap insurance only covers you if your vehicle is totaled or damaged and you owe more on your loan than the car is valued at when the incident happens. You can file a gap insurance claim if your car was stolen or if it was totaled in an accident.

How do you use Toyota Gap?

Here’s how GAP works: In the event of a total vehicle loss, GAP covers you once insurance has paid its share, paying the difference (or deficiency) between your Toyota’s insurance payment (usually market value) and the balance on your finance or lease contract.

How much will my gap insurance refund be?

To calculate how much of a refund you’ll get if you paid for the GAP policy upfront, you divide the total cost of the insurance by the number of months you had coverage—this gives you your monthly premium. Once you know the monthly premium, you can multiply it by the number of months you have left on your policy.

Does gap insurance cover deficiency balance?

This may create a deficiency balance or a ‘gap’ resulting in a serious financial hardship for the borrower. The ‘gap’ may even jeopardize repayment of the loan. GAP is designed to relieve the borrower of the responsibility for the remainder of the loan balance that the primary insurance carrier does not cover.

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