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Calcimator

Gap Insurance Calculator

Calculate how much you are underwater on your auto loan and whether gap insurance is worth the cost.

Inputs

$
$
years
%
$

Results

Gap Coverage Amount

$3,212.50

≈ 3 smartphones

Estimated Market Value$25,287.50
Underwater Amount$2,712.50
Loan-to-Value Ratio110.7%
Insurance Would Pay$24,787.50
Years Until Above Water3 years
How to Use This Calculator
  1. Enter the Vehicle Purchase Price (what you paid, not MSRP).
  2. Set your Current Loan Balance — the amount still owed to the lender.
  3. Enter the Vehicle Age in years and the Annual Depreciation Rate.
  4. Input your Insurance Deductible so the gap coverage calculation is accurate.
  5. Review the Gap Coverage Amount, Estimated Market Value, and how much you are underwater on the loan.

How the result changes with Current Loan Balance

Current Loan BalanceGap Coverage Amount
$20,000.00$0.00
$70,000.00$45,212.50
$130,000.00$105,212.50
$180,000.00$155,212.50

What each input means

Vehicle Purchase Price
Original purchase price or MSRP of the vehicle.
Current Loan Balance
Remaining balance on your auto loan.
Vehicle Age
Age of vehicle in years since purchase.
Annual Depreciation Rate
Average annual depreciation. New cars depreciate ~15-25% in year 1, then 10-15% after.
Insurance Deductible
Your comprehensive/collision deductible amount.

How this is calculated

Worked example, using the default values

  1. Identify Input Parameters
    4 parameters
    Vehicle Purchase Price = 35000, Current Loan Balance = 28000, Vehicle Age = 2, Annual Depreciation Rate = 15 = 5 input(s) provided
  2. Calculate Gap Coverage Amount
    Gap Coverage Amount
    3212.5 = $3,212.5
  3. Calculate Estimated Market Value
    Estimated Market Value
    25287.5 = $25,287.5
  4. Calculate Underwater Amount
    Underwater Amount
    2712.5 = $2,712.5

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