GAP Insurance. Protect Your Car Loan Investment
If your car is written off or stolen, standard insurance only pays market value, which could be thousands less than what you owe. GAP insurance covers the difference, protecting you from out-of-pocket losses.
Why choose Simple Loans.
Covers the Shortfall
Pays the difference between your car's market value and your outstanding loan balance.
Total Loss Protection
Covers you if the car is written off in an accident or stolen.
New Car Replacement
Some policies include new-for-old replacement within the first 2 years.
Affordable Premiums
Typically $300-$800 for the life of your loan, a small price for big protection.
Peace of Mind
Know you won't be left paying off a car you can no longer drive.
Finance Integration
Can be bundled into your car loan repayments.
How GAP Insurance Works. A Real Example
Let's say you finance a new car for $45,000. After 18 months, the car is written off in an accident. Here's what happens:
- Outstanding loan balance: $38,000
- Comprehensive insurance payout (market value): $32,000
- Shortfall you'd owe without GAP: $6,000
- With GAP insurance: The $6,000 gap is covered, you owe nothing
Without GAP insurance, you'd be stuck paying $6,000 for a car you can no longer drive. GAP insurance eliminates this risk for a one-off premium of a few hundred dollars.
Who Should Consider GAP Insurance?
GAP insurance is especially important for:
- No-deposit buyers: If you've financed 100% of the car's value, you're immediately in negative equity
- New car buyers: New cars depreciate fastest in the first 1-3 years
- Longer loan terms: A 7-year loan means more time where you might owe more than the car is worth
- Cars that depreciate quickly: Some brands lose value faster than others
- Buyers who've added extras: Accessories, extended warranties, and fees added to the loan increase the gap
If any of these apply to you, GAP insurance is a smart investment. Ask your Simple Loans specialist about including GAP cover with your finance.
How it works.
Your Car Is Written Off
An accident, theft, or natural disaster results in a total loss of your vehicle.
Insurance Pays Market Value
Your comprehensive insurer pays the current market value, which may be less than you owe.
GAP Covers the Difference
GAP insurance pays the shortfall between the insurance payout and your remaining loan balance.
Frequently asked questions.
What is GAP insurance?
GAP (Guaranteed Asset Protection) insurance covers the difference between what your comprehensive insurer pays out and what you still owe on your car loan if the vehicle is written off or stolen.
When do I need GAP insurance?
GAP insurance is most valuable when: you've financed more than 80% of the car's value, you have a longer loan term (5-7 years), your car depreciates quickly, or you've included fees and accessories in the loan amount.
How much does GAP insurance cost?
GAP insurance in Australia typically costs between $300-$800 for the life of the loan, depending on the vehicle value and loan amount. It can be paid upfront or added to your loan repayments.
Is GAP insurance worth it?
For most new car buyers with finance, yes. New cars can lose 20-30% of their value in the first year. If your car is written off in that period, you could owe thousands more than the insurance payout without GAP cover.
Does GAP insurance cover negative equity?
Yes, that's exactly what it's designed for. If you're 'upside down' on your loan (owing more than the car is worth) and the car is totalled, GAP insurance covers the negative equity.
Can I get GAP insurance after buying my car?
Yes, you can typically purchase GAP insurance within the first 6-12 months of your car loan. However, it's usually cheaper and easier to arrange at the time of finance.
Ready to get started.
Free assessment, no upfront costs. We compare 50+ lenders to find you the best deal.
People we also help
Simple Loans is a finance comparison tool. Holder of Australian Credit Licence No. 509582. All applications are subject to lender approval. Terms, conditions, fees and charges apply. This information is general in nature.
Free assessment
Tell us what you need, we'll do the running around
One short form, then a specialist compares our 50+ lender panel for your situation. Rates from 6.49% p.a. No credit impact to get started.