that will pay or waive the difference between the amount you still owe on a lease or loan and the insurance settlement for a totaled vehicle—and while it’s more convenient to buy GAP through Ford, it’s usually cheaper when you buy through your insurance provider.

If you are planning on buying a Ford from the dealership, the dealer will most likely offer you Guaranteed Auto Protection. In the article below, we’ll break down everything you need to know about this type of coverage, including who it’s geared towards and how to get the same coverage from your auto insurance provider.

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How does Ford GAP work?

As is commonplace amongst most modern automakers,

Ford

offers a type of insurance coverage, called Guaranteed Auto Protection (GAP), to those buying a new Ford from the dealership. You’ll often see GAP offered in conjunction with other benefits, such as extended warranty coverage and

roadside assistance services

If you do decide to purchase Ford’s GAP, Ford will provide the following benefits:

Coverage for your primary insurance deductible up to $1,000 (except in Alaska)

Covers your vehicle’s finance agreement terms for up to 96 months

Covers the amount financed up to $125,000 or 150% of the vehicle’s MSRP/NADA value

Ford also offers something called GAPAdvantage, which includes all the same benefits of their GAP coverage, but adds an additional $1,000 dealer credit for a replacement vehicle.

To put things in perspective, let’s say you’ve just purchased a 2023

Ford Expedition

for $54,155—the moment you drive it off the lot, it starts to depreciate by roughly 10%, reducing the vehicle’s value to approximately $48,890 after the first year of ownership, leaving you with an

upside-down loan

. If you are involved in an accident and your vehicle is declared a total loss, GAP insurance will help ensure you aren’t left with a deficient balance.

When buying a brand new vehicle, Ford’s GAP insurance is only available during the initial financing period—that is to say, when you purchase the vehicle. Depending on your financial situation, you can either pay for your GAP insurance in full or bundle it into your loan payments. Just keep in mind that, if you change your mind later and want to add GAP coverage, you won’t be able to do it through Ford.

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How much does Ford GAP cost?

On average, adding GAP insurance to a car loan or lease contract through your local Ford dealership costs between $500 and $700.

Ford GAP vs. alternative GAP insurance

There is also a similar type of GAP insurance—guaranteed asset protection—offered by most major insurance providers, including

Progressive

State Farm

, and more.

Guaranteed Auto Protection purchased through Ford is typically the more convenient option, but it isn’t always the most cost-effective. For a more in-depth look at the benefits and disadvantages of buying Ford’s GAP insurance vs. purchasing

gap insurance

through your provider, take a look at the table below.

Ford Guaranteed Auto Protection	Gap coverage from your auto insurance company
Available only during the initial financing period	Is available as long as: Your loan balance is greater than the actual cash value (ACV) of your vehicle You're either the first or second owner of the vehicle (prior ownership guidelines aren’t the same for every insurance company) Your vehicle meets both the mileage and age requirements set by your insurance provider, which usually means the vehicle has low mileage and is less than three years old
$500 to $700	Typically costs between $20 and $40 per year
Cancellation only during the initial grace period	Can be canceled at any time
Full refund only within 60 days	Refunds are standard

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Do you need GAP insurance?

Purchasing GAP insurance isn’t a universal requirement when taking out a car loan or leasing a vehicle—it can be, but most lenders or lessors don’t require it.

GAP insurance is, however, a good idea if you’ve financed or leased a vehicle and your down payment amounts to less than 20% of the vehicle’s purchase price, or if you plan on financing for a longer term. GAP insurance can also be a good idea for those who have purchased a vehicle model that depreciates in value quickly, such as the

Ford Ranger

and Ford Expedition.

If you own your vehicle outright or if you owe less than the vehicle’s current actual cash value, you don’t need to purchase GAP coverage—you will, however, still need to purchase the

minimum car insurance required by your state

How to cancel Ford GAP insurance

If you come to realize that Ford’s GAP insurance isn’t worth the price you paid, you have a period of 60 days after purchasing during which you can cancel the policy and receive a full refund. Canceling after this 60-day period, however, can be a bit more challenging.

You’ll need to call the dealership or check the terms of your lease to find out how to negotiate a GAP cancellation if you miss the initial grace period.

In order to make things easier for yourself, we recommend getting an insurance quote for both your vehicle and your insurance carrier’s GAP insurance before purchasing the car—doing so will allow you to show the dealer proof of insurance on your phone, while also giving you a better idea of whether to accept or decline Ford’s GAP insurance.

What is the Ford GAP insurance refund process?

Should you decide to cancel your Ford GAP insurance within 60 days of purchasing it, you’ll be eligible for a full refund. If you cancel your Ford GAP insurance sometime after this initial grace period, you may be eligible for a partial refund—check your loan agreement or contact the dealership for more details.

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