Best Cheap Gap Insurance Companies in Arizona: Quotes, Discounts (2023)

Gap Insurance in Arizona

Gap insurance is an optional add-on insurance policy that will save you lots of stress and money if you ever need to file a total loss claim for your leased car. Buying this coverage is a smart choice for Arizona drivers who are financing their vehicles. Finding affordable gap insurance coverage is an easy process with Insurify, which helps you compare 10+ gap insurance quotes in one place.

See More: Compare Car Insurance

Best Companies for Gap Insurance in Arizona

Insurance costs for leased vehicles in Arizona can vary significantly from provider to provider—going as high as $391 per month and as low as $138 per month—so it’s important to shop around to find the best deal for you. You can use the table below to compare average monthly insurance rates from the best auto insurance companies in Arizona.

See More: Cheap Car Insurance in Arizona

What is gap insurance?

Short for “guaranteed asset protection,” a gap insurance policy protects you from having to continue to make monthly payments to pay off your car loan on a vehicle you no longer drive in the event of a total loss accident or theft.

After you purchase a new car, its value goes down anywhere from 20 to 30 percent over the course of the first year. As a result of this depreciation, there is a gap between what your car is actually worth—your car’s actual cash value (ACV)—and what you owe on it. For example, your car’s ACV may go down to $10,000, but your outstanding auto loan balance could still be $15,000.

In the event of a total loss accident or theft, your insurance company will reimburse you for your car’s actual cash value—not for the amount you owe on it. For example, if your car’s ACV is $10,000 but you owe $15,000 on it, you will get $10,000 and still have $5,000 in debt. Gap insurance covers this $5,000 negative equity so you can invest in a new vehicle free of past obligations.

Who should buy gap insurance in Arizona?

Driving a vehicle that is worth less than what you owe on it can prove to be risky. As a general rule, if you’re financing your car, you need gap insurance, and some lenders may even require a full-coverage policy (with comprehensive coverage and collision coverage) and gap insurance as an add-on.

However, there is one exception to this rule. If you make a down payment of higher than 20 percent, then you may skip getting gap insurance coverage because your chances of ending up with negative equity—owing more on your car than it is actually worth—are significantly lower.

It’s important to be aware of the following factors that increase your chances of ending up with negative equity—or being “upside-down” on your car:

• You made a down payment of less than 20 percent. The lower your down payment is, the faster your car will depreciate.

• It is going to take you longer than 60 months to pay off your car loan. If you have a long-term loan or leasing agreement, you have a higher chance of owing more on your loan than your car’s actual worth.

• You regularly drive long distances. Your vehicle will depreciate faster if your mileage is unusually high, which will soon result in negative equity if you’re financing it.

• You drive a sports car. If you’re financing a luxury vehicle—such as a sports car—it will depreciate faster than more standard models. Investing in an expensive vehicle makes gap insurance worth it.

Arizona Gap Insurance Laws

Arizona doesn’t require drivers to carry gap insurance. You simply need to meet or exceed its minimum required liability car insurance coverage and underinsured/uninsured motorist coverage. However, your lending institution may require you to purchase either a full-coverage policy with gap insurance as an add-on or stand-alone gap coverage.

Getting a full-coverage policy with gap insurance as an add-on doesn’t have to be expensive or complicated. Use Insurify to compare dozens of car insurance quotes in one place and find the cheapest car insurance policy for you with the most coverage.

How much gap insurance do I need in Arizona?

How much gap insurance you need as an Arizona driver depends on three factors:

• How much you anticipate your vehicle to depreciate. On average, you can expect your vehicle to lose over 60 percent in value over the course of five years.

• How much you owe on your vehicle. The higher the amount on your auto loan, the more gap insurance coverage you will need.

• Your personal preferences and budget. Ultimately, how much of a risk you are open to take is a personal choice.

Insurify recommends estimating how much your vehicle will depreciate over time and how much you will continue to owe on it and then picking a gap insurance policy that covers this difference.

See More: How Much Car Insurance Do I Need?

How Gap Insurance Works in Arizona

You can purchase a gap insurance policy as an add-on to your full-coverage auto insurance policy and as a stand-alone coverage from a car dealership, a financial institution (for example, a bank or a credit union), or a car insurance company that offers gap coverage as a separate policy.

It’s important to understand that gap insurance only covers negative equity—the difference between your outstanding car loan balance and your vehicle’s actual cash value–in the event of a total loss accident or theft. To cover the damages that your vehicle sustains as a result of an accident if it’s not totaled, you need to use your comprehensive or collision insurance.

Gap insurance kicks in regardless of fault, so it doesn’t matter whether it was you or the other driver who caused the accident—if you have a gap insurance policy, you will still be covered. However, gap insurance only covers negative equity and cannot be used for medical bills or lost wages.

How Much Gap Insurance Costs in Arizona

On average, you can expect to pay $251 per month in insurance premiums if you drive a leased vehicle. If you purchase gap insurance as an add-on to your existing full-coverage policy, you can pay as little as an additional $20 per year.

However, if you decide to get gap insurance as a stand-alone policy from a car dealership or a financial institution, you can expect a high flat fee of over $700–$800+. Similarly, if you purchase gap insurance as a stand-alone policy from an insurance company, it can cost you a one-time fee of $200–$300 and up.

See More: Average Cost of Car Insurance in Arizona

How to Buy Gap Insurance in Arizona

The easiest and cheapest way to purchase a gap insurance policy is as an add-on to your existing full-coverage auto insurance policy. The next best way to buy gap insurance in Arizona is as a separate policy from a gap insurance company if you don’t have existing comprehensive and collision coverage.

According to Insurify data, you need to get at least four quotes from different auto insurance companies to find the best deal with the most coverage and the lowest rate. Insurance agents weigh factors such as your age and credit score differently to determine your unique car insurance rate, so it’s important to see what your options are before you commit to one provider.

Requesting car insurance quotes from different companies and comparing them on your own can be a tedious and confusing process. You would need to fill out long forms answering the same questions over and over just to get a new quote from a different provider and then manually organize and compare them to find which company is giving you the best deal.

Save yourself time, money, and stress, and use Insurify, the top-rated and most-rated car insurance comparison site in the U.S., which uses the latest AI technologies to instantly give you access to 10+ real-time car insurance quotes. Simply spend five minutes on Insurify’s trusted site answering a few easy questions, and start comparing cheap quotes tailored to your needs.

Frequently Asked Questions: Gap Insurance in Arizona