Free tool
Car loan total loss and gap calculator
See how a total loss payout, your deductible, gap coverage and add-on refunds add up against your loan payoff, and whether you may still owe the lender.
If your car is totaled while you still owe on it, the insurer pays the car's actual cash value, usually straight to the lender. When you owe more than the car is worth, there is a shortfall. Gap coverage may pay some or all of it, but gap contracts have exclusions, and the loan does not go away because the car did. Have three documents ready: the lender's payoff quote, the insurer's settlement letter and your gap and add-on contracts.
Everything you type stays in this browser tab. Nothing is sent to us or saved. The example numbers are hypothetical; replace them with the figures from your payoff letter, settlement letter and contracts.
Insurer pays (usually to the lender)
$14,500
ACV $15,000 minus $500 deductible
Gap pays (estimate)
$1,570
$3,000 excluded from gap
Add-on refunds (estimate)
$1,930
Contracts vary
You may still owe
$3,500
The math, step by step
- Payoff $21,500 − insurer payment $14,500 = $7,000 short after insurance.
- Gap estimate: payoff minus excluded items ($3,000) minus ACV $15,000, minus add-on refunds $1,930 = $1,570.
- Add-on refunds of $1,930 are assumed to go to the lender to reduce the balance.
- Result: $21,500 − $14,500 − $1,570 − $1,930 = $3,500 you may still owe.
A remaining balance is still owed to the lender under the loan contract. Before you stop paying, ask the lender in writing for the exact amount, how it was calculated, and whether a payment plan is available.
Add-on cancellation request letter
Send one to each product administrator listed in your contracts (or to the dealer, if the contract says so). Edit it before you send it.
[Your name] [Your address] [Date] To: [Product administrator or dealer named in each contract] Copy to: [Lender name], account [loan account number] Re: Request to cancel optional products and refund unearned charges Vehicle: [year, make, model, VIN] My vehicle was declared a total loss. The products below were purchased with the vehicle and no longer provide any benefit to me. I am asking you to cancel each one effective [date of loss] and refund the unearned portion of the charge. Products to cancel: 1. Extended warranty / vehicle service contract: purchase price $2,400, 60-month term 2. Tire and wheel protection: purchase price $600, 36-month term Please: 1. Confirm the cancellation in writing. 2. Send me your refund calculation, including the method used and any cancellation fee. 3. If the product was financed, apply the refund to my loan account above and confirm the amount to me and to the lender. If the loan has been paid in full, send the refund to me at the address above. Enclosed: the total loss settlement letter from the insurer and a copy of each contract or its first page. Please respond within 30 days. Thank you. Sincerely, [Your name]
By Serdar Arslan, editor · Last reviewed · How we research
How the calculator works
- Insurer payment. Actual cash value minus your deductible if the claim is under your own policy. A claim paid by the at-fault driver's insurer has no deductible.
- Gap estimate. Your payoff, minus amounts your contract excludes (often rolled-in negative equity, past-due payments and late fees), minus the actual cash value. If your contract reduces the benefit by refunds of cancelable products, those are subtracted. If it covers your deductible, that is added up to the limit you enter. A maximum benefit or LTV cap is applied last.
- Add-on refunds. Price × (months left ÷ total months) minus any cancellation fee. This is a simple pro-rata estimate. Some contracts use mileage, a different formula, or deduct claims already paid.
- What remains. Payoff minus the insurer payment, the gap payment and the refunds.
The LTV cap option uses one common approach: if the original amount financed was above the cap, the gap benefit is reduced in proportion. Your contract may handle it another way. Treat every result here as an estimate to check against your paperwork.
Worked example (hypothetical numbers)
The payoff is $21,500. The insurer values the car at $15,000 and subtracts a $500 deductible, so it pays $14,500 to the lender. The gap contract excludes the $3,000 of negative equity rolled in from a trade-in and does not cover the deductible. A $2,400, 60-month service contract with 18 months used refunds about $1,630 after a $50 fee, and a $600 tire and wheel plan with half its term left refunds about $300. Gap pays about $1,570. That leaves roughly $3,500 owed: the excluded negative equity plus the deductible.
What the official sources say
The CFPB describes GAP as an optional product intended to cover the difference between what you owe and what the insurer pays if the car is totaled or stolen, and notes that these products often have eligibility restrictions. It also says you can cancel optional add-on products and may be entitled to a refund when a loan is paid off early. In a 2022 review, the CFPB found loan servicers that failed to obtain refunds of unearned add-on fees when loans ended early, which left some borrowers with higher balances. The NAIC's consumer guide notes that standard auto insurance does not pay off a loan when the car is worth less than you owe.
Some states regulate GAP refunds by statute. Colorado, for example, requires refunds of unearned GAP fees when a financed loan is prepaid or the car is repossessed (C.R.S. § 5-9.3-106), according to an interpretive letter from the state's consumer credit administrator. Rules differ by state, so ask your state attorney general or banking regulator if a refund is refused.
If a balance remains
- Ask the lender for a written breakdown of the remaining balance and the date interest stops.
- Ask the gap administrator for a written explanation of every deduction from the gap benefit.
- Send the cancellation letter for each add-on, and follow up until the refund is credited.
- If the payout itself looks low, check it with the total loss offer checker. A higher valuation reduces the shortfall dollar for dollar.
- Ask the lender about a payment plan before you miss a payment. Missed payments can add late fees that gap usually does not cover.
More background: total loss settlements and the appraisal clause, property damage and total loss claims, and the valuation dispute letter template.
Frequently asked questions
›Do I still owe my car loan if the car is totaled?
Yes. The loan is a separate contract with the lender. The insurance payment usually goes to the lender first, and if it does not cover the payoff, the rest is still owed unless gap coverage or something else pays it.
›What does gap insurance cover?
The CFPB describes GAP as a product meant to cover the difference between what you owe on the loan and what the insurer pays when the car is totaled or stolen. Contracts often have limits and exclusions, so read yours.
›Why didn't gap pay the whole balance?
Common reasons include negative equity rolled in from a trade-in, past-due payments and late fees, the cost of add-on products, a deductible the contract does not cover, a maximum benefit, or a loan-to-value cap. This calculator lets you test each one.
›Can I get money back for an extended warranty after a total loss?
Often, yes. The CFPB says certain add-ons may be canceled for a refund, and many service contracts refund the unused part. Contracts vary on the method and fees, so the refund here is an estimate.
›Who gets the refund, me or the lender?
If the product was financed, the refund is usually applied to the loan. If the loan is already paid off, ask that the refund be sent to you. Put the request in writing and keep a copy.
Sources
- CFPB: What is guaranteed asset protection (GAP) insurance?
- CFPB blog: Overcharging for add-on products on auto loans (May 2022)
- CFPB blog: Servicemembers, stand your guard when it comes to add-on products (Dec. 2018)
- NAIC: A Consumer's Guide to Auto Insurance
- Colorado UCCC Administrator: Interpretive opinion letter on GAP refund notices (C.R.S. § 5-9.3-106)