We are looking to buy an EV and I keep reading you should get GAP insurance since EVs depreciate so much. But my insurance company, State Farm told me they don’t offer GAP. We checked with another local insurance company and they said they don’t offer it as well. I’ve heard you can get it from the dealership if you’re financing from them, but one of the vehicles we are considering is a Tesla, and my research indicates they don’t offer GAP either. Is gap insurance just not a thing these days for some reason? Should I not even bother?
Posted by Slow_Investment_2211
10 Comments
State Farm does not offer GAP insurance as a coverage. Typically GAP is provided by the dealership you buy the vehicle from or the lender.
I would purchase GAP insurance if you’re not putting down a sizable down payment to bring the financed amount down as vehicles depreciate when you drive them off the lot.
Gap insurance is very much a thing these days and you absolutely should get it. If you are unable to find an insurance company that offers it many lenders do.
You are correct that Telsa doesn’t because they are just the manufacturer and not the lender. Most of my clients that finance with Telsa are usually through Chase, so you can check with them or arrange your own financing with a local credit union which most likely will offer GAP
This may just be me thinking, but I’d consider a gently used EV that someone else already took the big depreciation hit on.
Farmers offers gap coverage for 2 years, on new cars only.
They call it residual debt coverage.
A lot of companies offer loan/lease gap. How old is the car? That might be the issue as they generally only offer it on vehicles a year or two old.
Unless you are putting down a significant down payment, I would definitely say to get GAP. The dealership is the last place that I would get it from.
Reach out to an independent agent, they might be able to find it. Some lenders also might be able to assist.
GAP is definitely still a thing – but as others have said it’s typically offered by your lender, not your auto insurance. This is because they’re the ones who want to make sure they get back the money they loaned out in the event the collateral (your car) is destroyed.
Also just as a single point of reference – My 2025 EV MSRP’d for about $35,000. I bought it used 1 year later for $22,000. If I had bought it new, with minimal money down, I would be several grand underwater on the loan right now, and thus would want to have Gap to protect me in case the car was totaled.
Since I bought it used, and put about 25% down (and didn’t extend the loan out 7 or 8 years), the value of the vehicle is staying above the loan amount, meaning Gap insurance doesn’t do anything for me.
Insurance companies usually offer “loan/lease payoff” ehich provides up to an additional 25% on top of your ACV payout. This is NOT traditional gap.
Check with your local credit union. They offer GAP, although it might be limited to cars financed through them.
GAP insurance is usually through the lender and it’s added to your loan payment.