Arkansas gap insurance: Everything you need to know

How much is gap insurance in Arkansas?

On average, gap insurance in Arkansas costs $2,228 a year, but rates vary by company. The cost of your vehicle also affects gap rates. Expensive or luxurious cars tend to depreciate faster than standard vehicles, meaning gap coverage would have to pay more, which increases coverage rates.

Cheapest gap insurance companies in Arkansas

Travelers offers the cheapest gap insurance coverage in Arkansas at $1,462 annually. Not all car insurance companies provide gap coverage, and rates differ widely by company.

See the table below to find the cheapest insurance companies for gap coverage in Arkansas.

Company	Auto insurance rates with gap premium	Gap premium
Travelers	$1,462	$40
Auto-Owners	$1,965	$70
Auto Club Enterprises (AAA)	$2,186	$85
Progressive	$2,464	$90
Farmers	$3,062	$144

Read our methodology

Average gap insurance cost in Arkansas by city

West Memphis is the most expensive to buy gap insurance with an average rate of $2,474, and Fayetteville is the cheapest with an average of $2,041. Where you live in Arkansas can affect your insurance rates. Auto insurance rates are higher in cities with more crime and theft since your vehicle is more likely to be damaged or stolen.

This table shows the average gap insurance rates by city for Arkansas.

City	Auto insurance rates with gap premium	Gap premium
Fayetteville	$2,041	$77
Little Rock	$2,114	$75
Elkins	$2,125	$83
Newport	$2,140	$83
Jacksonville	$2,157	$77
Sherwood	$2,158	$79
Hot Springs	$2,266	$89
Hope	$2,363	$98
El Dorado	$2,441	$100
West Memphis	$2,474	$95

Read our methodology

How much is gap insurance in Arkansas by age group?

Gap insurance rates are higher for younger drivers because they have less experience and are more likely to take risks while driving, increasing the odds of a total loss. As drivers get older, their rates go down. For example, an 18-year-old pays an average of $9,012 per year, while a 25-year-old pays around $2,929 annually.

The table below lists the average gap insurance rates in Arkansas based on age.

Age group	Auto insurance rates with gap premium	Gap premium
Teen	$9,012	$332
Young adult	$2,929	$115
Adult	$2,228	$86
Senior	$1,964	$72

Read our methodology

How does gap insurance work in Arkansas?

When you buy or lease a new car, depreciationDepreciation is the decrease in your car's value over time due to wear and tear, age and mileage. Depreciation is used to determine the actual cash value of a vehicle in the event of a total loss. can quickly cause you to owe more than the car is worth. If your car is totaled, the insurance company will only pay out the car's actual cash value, which may leave you owing on the loan. That's where gap insurance comes in. If your vehicle is totaled or stolen, gap insurance covers the difference between your car's value and the loan payoff.

"Gap is designed for people that take long-term loans and/or roll taxes, service plans, or warranties into their loan," said Zack Pope, agency manager at David Pope Insurance in Missouri. "Most gap coverages only go a certain percent over market value to pay off a loan for a totaled vehicle (typically 25%). It costs significantly less money to get gap through your insurance than to purchase it from the dealership."

For example, imagine you have a $40,000 car loan, but your vehicle's actual cash value is only $35,000. If someone steals your car, your insurance company reimburses you $35,000, minus your deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim.. Gap insurance pays the remaining $5,000 you still owe on the loan. Without gap insurance, you must cover this difference out of pocket.

Once your loan balance is lower than your car's value, you can drop gap coverage. You can cancel gap insurance anytime, but you may not be able to add it whenever you want. Most insurers require you to add the coverage soon after you buy a car.

Many lenders also require gap insurance when you take out a loan. You can buy gap coverage from your lender or car dealership, but adding it to your existing auto policy usually costs less.

Where to buy gap insurance in Arkansas

Many insurance companies, including major carriers, offer gap insurance in Arkansas. It's relatively easy to add coverage to your current auto insurance policy.

Adding gap coverage to your auto insurance policy is usually the most cost-effective option. While you can purchase gap coverage from most car dealers and lenders, those policies tend to be more expensive, making it a less attractive option.

Methodology

We gathered car insurance rates with and without gap insurance through our data partner, Quadrant Information Services.

Averages are annual and based on our full coverage data set. This data set is based on:

Bodily injury liability of $100,000 per person and $300,000 per incident
Property damage liability of $100,000 per incident
Comprehensive and collision deductibles of $500
40-year-old driver
Honda Accord LX
Good credit
A clean driving record
12-mile commute, 10,000 annual mileage

To show the cost of gap insurance, we have compared rates with gap insurance added to the averages without gap insurance, and the difference is shown as the annual cost of gap insurance.

Rates are based on an analysis of over 5 million data points in all 50 states and Washington, D.C. from 138 companies.

Arkansas gap insurance: FAQs

Is gap insurance required in Arkansas?

Arkansas law doesn't require gap insurance, but your lender may require it.

Who should buy gap insurance in Arkansas?

You may need gap insurance if you have a car loan or lease in Arkansas. Drivers who make a small down payment typically owe more than the vehicle is worth since cars depreciate faster than the loan is paid down, making gap insurance a good idea.

You don't need gap insurance if you own your car or made a large down payment to ensure that you owe less than the car's value at the start of your loan.

What is standalone gap insurance in Arkansas?

Standalone gap insurance is a separate policy, not part of your car insurance. You can buy it from your lender or a private company.

Does gap insurance cover leased cars in Arkansas?

Arkansas gap insurance covers leased cars when the driver owes more than the car's current market value. You can remove gap coverage once your vehicle is worth more than what you still owe.