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How do you protect yourself from the loss of your car if it gets totaled? Simple: gap insurance. But many drivers don’t know what gap insurance is, even though it’s relatively common among vehicle owners in New Hampshire. Don’t confuse gap insurance with other types of automobile coverage.

The coverage is entirely separate from what you choose for comprehensive and collision. That’s why it is important to know exactly what it does before buying a policy. It’s an excellent option to add to your car insurance policy. And if you’re looking for auto coverage, the best way to find the lowest rates is to use Insurify to compare multiple car insurance quotes.

See More: Compare Car Insurance

Best Companies for Gap Insurance in New Hampshire

How much is gap insurance in New Hampshire?

The average policyholder in New Hampshire pays $122 per month for a car insurance policy with gap insurance. However, what you pay for car insurance will depend on a variety of factors, such as your age and your driving record.

The top three companies for cheap gap insurance are Midvale, Travelers, and Nationwide. Premiums range from an average of $93 to $113 per month.

Insurance CompanyAverage Monthly Cost for Leased Cars in New Hampshire
Midvale Home & Auto$93
Liberty Mutual$139
The General$207
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.

See More: Cheap Car Insurance in New Hampshire

What is gap insurance?

Gap insurance, also known as guaranteed auto protection, is a type of insurance that protects you from what’s called “residual losses.” This means if your car is totaled or stolen while under a loan, gap insurance will cover your financial liability for the unpaid balance of your outstanding loan—minus any collision and comprehensive coverage that may apply.

Because it pays the leftover balance of a car loan after the vehicle is totaled, drivers typically buy gap insurance only for financed vehicles. Gap coverage wouldn’t help you if you paid your loan in full or used cash (instead of a loan) to buy the car.

Lenders can sometimes require you to have gap insurance in addition to a full-coverage policy. Lenders can specifically require it when financing certain cars, trucks, SUVs, and other vehicles that may depreciate and lose value faster than the average car.

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Who should buy gap insurance in New Hampshire?

Before you purchase gap insurance, it’s essential to know whether you even need it. Every situation is different. Depending on factors like the age of the vehicle and the amount you financed, it may not be a necessary insurance product for you.

Generally, if you’re buying a new car and financing it with a loan—whether it’s through an auto dealership or bank—you should consider buying gap insurance. It’s also a good idea to consider purchasing coverage for your new car if your:

  • Down payment was less than 20 percent.

  • Loan term is for 60 months or more.

  • Vehicle is leased.

  • Vehicle tends to lose value faster than average.

  • New car loan includes negative equity from an old car loan.

If there is a chance for a gap in coverage in the event of a total loss, gap insurance can save New Hampshire drivers thousands.

New Hampshire Gap Insurance Laws

New Hampshire is one of the few states that doesn’t require auto insurance for all drivers. Like comprehensive and collision coverage, gap insurance is optional in the Granite State.

You may not face a penalty for driving uninsured, but you could face financial responsibility for all damages, medical payments, and injuries if you’re in an accident. The same is true for gap coverage—New Hampshire doesn’t require it, but the theft or loss of your vehicle could leave you with substantial financial liability for a car you don’t even own anymore.

How much gap insurance do I need in New Hampshire?

Although gap insurance may be an added expense after purchasing a new car, it’s often cheaper than paying off a loan with interest. When determining how much gap insurance you need, consider how much you still owe on your car.

The higher your loan amount, the more gap coverage you may need. On the other hand, you don’t need gap insurance if you don’t have a car loan or lease. You also won’t need it forever—you can drop coverage once your car loan balance falls below the value of your vehicle.

See More: How Much Car Insurance Do I Need?

How Gap Insurance Works in New Hampshire

Gap insurance in New Hampshire works much as it does in other states. There’s one exception when calculating your gap insurance coverage limit—New Hampshire is one of the few states that doesn’t charge sales tax when you buy a vehicle. Without adding sales tax into the total amount of your loan, you won't need as much gap insurance coverage.

For example, suppose you buy a car for $38,000 and take advantage of zero-down financing at a dealership in Concord. You don’t pay sales tax, but you have department of motor vehicles (DMV) fees that may be added to your vehicle loan. You leave the dealership with a loan balance of $38,804.

The car’s market value is pretty close to your loan amount when you buy the vehicle, but vehicle values depreciate quickly. You’ll lose over 20 percent of the value after the first year, then about 10 percent each year after that.

In this example, your car’s value is predicted to drop by $7,600 the first year. You’ll need at least that much in gap insurance since it’s very unlikely you’ll pay off that much of the loan in that time. Now, suppose you were in an accident six months after buying the car. Your car might be worth around $34,200, but you could still owe $36,394 on your loan.

Your car insurance company will only pay the value of the car, leaving you with a $2,194 balance left over. But you have gap insurance. Your policy covers the difference minus any policy deductible you might be responsible for paying.

See More: Average Cost of Car Insurance in New Hampshire

How Much Gap Insurance Costs in New Hampshire

The average policyholder in New Hampshire pays $122 per month for gap insurance. However, premiums can vary. How much you pay depends on the lender’s underwriting process. Dealerships tend to charge higher premiums than car insurance companies.

Ask your auto insurance policy provider if they offer gap coverage. You could save on the total cost and bundle it with an existing auto, renters, or New Hampshire homeowners policy, making it more convenient and affordable.

How to Buy Gap Insurance in New Hampshire

Shopping for gap insurance is best done at the time of purchase. However, you may not want to buy a policy at the dealership or through the lender you’re financing through—they typically charge higher prices for gap insurance.

To get the most bang for your buck, compare quotes on an online comparison platform like Insurify. Here, savvy drivers can compare New Hampshire car insurance quotes and policies to find the best rates on gap insurance that will satisfy lending requirements. This way, you’ll save both time and money while getting the best financial protection for your new ride.

Frequently Asked Questions: Gap Insurance in New Hampshire

  • New Hampshire state law doesn’t require gap insurance. It’s one of the few states that doesn’t have car insurance requirements. Still, adding a gap policy on top of your bodily injury liability insurance and property damage liability coverage is a smart move. Car insurance and gap coverage can protect you financially if your vehicle is totaled or stolen.

  • You don’t typically get your money back from a gap policy. But there’s an exception if you pay your gap premium in advance and pay off your vehicle early. In that case, you could get a reimbursement for the unused portion of your policy.

  • If you’re a New Hampshire driver buying a new car or have just purchased a used vehicle, your best bet is to shop Insurify for gap insurance. You can compare New Hampshire auto insurance rates from multiple providers and select a gap insurance policy that fits your needs and budget.

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  • Data scientists at Insurify analyzed more than 40 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Service's database of auto insurance rates. With these insights, Insurify is able to offer drivers insight into how companies price their car insurance premiums.

Amy Beardsley
Amy BeardsleyInsurance Writer

Amy is a personal finance and technology writer. With a background in the legal field and a bachelor's degree from Ferris State University, she has a talent for transforming complex topics into content that’s easy to understand. Connect with Amy on LinkedIn.