New Mexico gap insurance: Everything you need to know

How much is gap insurance in New Mexico?

On average, gap insurance in New Mexico costs $2,278 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 New Mexico

The cheapest company for gap insurance in New Mexico is Progressive, with an average annual cost of $1,847. Not all car insurance companies offer gap coverage, and rates vary significantly by company.

Check out the table below to find the cheapest New Mexico insurance companies for gap coverage.

Company	Auto insurance rates with gap premium	Gap premium
Progressive	$1,847	$34
Farmers	$2,445	$103
Iowa Farm Bureau	$2,543	$26

Read our methodology

Average gap insurance cost in New Mexico by city

Gap insurance costs the most in Albuquerque, with an average rate of $2,377, while Fort Bayard has the lowest rate at $1,919. Where you live in New Mexico can impact your insurance costs. Cities with higher crime and theft rates have higher auto insurance rates since the risk of damage or theft is higher.

Here are the average gap insurance rates by city in New Mexico

City	Auto insurance rates with gap premium	Gap premium
Fort Bayard	$1,919	$49
Farmington	$1,943	$49
Gallup	$1,993	$47
Ruidoso	$2,039	$58
Las Cruces	$2,049	$52
Jal	$2,113	$60
Bernalillo	$2,171	$50
Roy	$2,176	$64
Corrales	$2,247	$48
Cuba	$2,255	$56

Read our methodology

How much is gap insurance in New Mexico by age group?

Car insurance rates for younger drivers are more expensive because they are more likely to engage in risky driving and lack the experience needed to avoid accidents. Rates go down as the driver gets older. For example, at 18 years old the average rate is $6,796 a year, and at 25 the average annual rate is $2,660.

The table below shows the average gap insurance rates in New Mexico by age.

Age group	Auto insurance rates with gap premium	Gap premium
Teen	$6,796	$177
Young adult	$2,660	$66
Adult	$2,278	$54
Senior	$2,047	$43

Read our methodology

How does gap insurance work in New Mexico?

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, let's say you have a $40,000 car loan, but your vehicle's actual cash value is only $35,000. If the car is stolen, your insurance company will reimburse 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 would cover the remaining $5,000 that you still owe on your loan. Without gap insurance, you'd be responsible for paying this difference out of pocket.

You can drop gap coverage once your loan balance is below your car's value. While you can cancel gap insurance anytime, you may not be able to add it later. Most insurers require you to add gap coverage soon after buying a car.

Where to buy gap insurance in New Mexico

Many insurance companies, including major carriers, offer gap insurance in New Mexico. 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.

New Mexico gap insurance: FAQs

Is gap insurance required in New Mexico?

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

Who should buy gap insurance in New Mexico?

If you have a car loan or lease in New Mexico, you might need gap insurance. If you made a small down payment, you could quickly owe more than your car is worth since vehicles lose value faster than you can pay the loan. In this case, gap insurance can be a smart choice.

You don't need gap insurance if you own your car or make a large down payment.

What is standalone gap insurance in New Mexico?

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

Does gap insurance cover leased cars in New Mexico?

New Mexico 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.