Guaranteed Auto Protection (GAP) Insurance Market Report 2025

The guaranteed auto protection (GAP) insurance market size has grown rapidly in recent years. It will grow from $3.97 billion in 2024 to $4.38 billion in 2025 at a compound annual growth rate (CAGR) of 10.3%. The growth in the historic period can be attributed to increase in demand for transportation, rise in vehicle sales, increased income levels.

The guaranteed auto protection (GAP) insurance market size is expected to see rapid growth in the next few years. It will grow to $6.48 billion in 2029 at a compound annual growth rate (CAGR) of 10.3%. The growth in the forecast period can be attributed to expansion of online insurance marketplaces, focus on personalized insurance solutions, growth of alternative financing options, expansion into emerging markets. Major trends in the forecast period include adoption of telematics and usage-based insurance (UBI), integration of ai and ml, introduction of digital platforms, collaborations by key players.

The substantial increase in vehicle sales is a significant factor contributing to the growth of the guaranteed auto protection (GAP) insurance market. The surge in vehicle sales is primarily attributed to the rising demand for transportation, a consumer preference for vehicles as a lifestyle product, and an increase in income levels, among other factors. Guaranteed auto protection (GAP) insurance proves beneficial to users by covering the disparity between the current value of a vehicle (covered by regular insurance) and the amount owed in the event of severe damage or total loss due to an accident. For example, as reported by the Society of Motor Manufacturers and Traders (SMMT), a UK-based trade association, passenger car sales in the UK are projected to increase by 25.8% from 140,958 units in 2022 to 177,266 units in 2023. Additionally, on a global scale, reports from the International Organization of Motor Vehicle Manufacturers, a France-based trade association, indicate an increase in global passenger vehicle sales from 56.43 million in 2021 to 57.48 million in 2022. Hence, the upswing in vehicle sales is a driving force behind the guaranteed auto protection (GAP) insurance market's growth.

The increasing number of road accidents is expected to drive growth in the guaranteed auto protection (GAP) insurance market. A road accident refers to an event on the road involving at least one moving vehicle, resulting in injury or death to individuals or damage to property. GAP insurance assists policyholders by covering the difference between insurance payouts and remaining loan balances after an accident. For instance, a report from the Bureau of Infrastructure and Transport Research Economics (BITRE), an Australia-based organization, revealed that in 2022, there were 1,194 road crash deaths, representing a 5.8% increase from 2021. Therefore, the rising incidence of road accidents is propelling the growth of the GAP insurance market.

Major companies in the guaranteed auto protection (GAP) insurance market are focusing on technologies that enhance risk assessment, streamline claims processing, and improve customer engagement, ultimately providing more tailored and efficient coverage options for consumers. One such approach involves optimal logistics strategies to maximize efficiency in delivering insurance services. For example, in August 2024, Opteven, a France-based insurance company, launched its Combined Return to Invoice and Financial Shortfall GAP Insurance. This insurance product covers the difference between the insurance payout and the original purchase price of a vehicle if it is declared a total loss due to events like fire, theft, or flood damage. By implementing these technologies and strategies, companies aim to better meet consumer needs and improve overall service delivery in the GAP insurance market.

The increasing incidence of motor vehicle theft is expected to drive growth in the guaranteed auto protection (GAP) insurance market. Motor vehicle theft refers to the criminal act of stealing or attempting to steal a motor vehicle. GAP insurance provides crucial financial protection in the event that a car is stolen and declared a total loss, helping policyholders avoid the stress of continuing loan payments on a vehicle they no longer own. For instance, a report from the National Insurance Crime Bureau (NICB), a US-based insurance information organization, revealed that in 2023, over 1 million vehicles were stolen, marking a 1% increase from 2022. Therefore, the rise in motor vehicle thefts is propelling the growth of the GAP insurance market.

In May 2022, Protective Life Insurance Company, a US-based financial services company, completed the acquisition of AUL Corp. for an undisclosed amount. This strategic move by Protective Life Insurance Company is aimed at expanding its product offerings, enhancing geographic reach, fortifying its balance sheet, and achieving economies of scale. AUL Corp. is a US-based vehicle insurance company that specializes in providing guaranteed auto protection insurance services for vehicles.

Major companies operating in the guaranteed auto protection (GAP) insurance market include Berkshire Hathaway Inc., Axa S.A., State Farm Mutual Automobile Insurance Company, Nationwide Mutual Insurance Company, Allstate Insurance Company, Liberty Mutual Insurance Company, Progressive Casualty Insurance Company, Zurich Insurance Group Ltd., Chubb Limited, The Travelers Indemnity Company, The Hartford Financial Services Group Inc., American Family Insurance, Allianz SE, Auto-Owners Insurance Group, Arch Insurance Group Inc., Kemper Corporation, Amica Mutual Insurance Company, Erie Insurance, Infinity Auto Insurance, Admiral Group plc, Esurance Insurance Services Inc., American Automobile Association Inc., Assurity Solutions, Motor Gap Limited.

North America was the largest region in the guaranteed auto protection (GAP) insurance market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the guaranteed auto protection (gap) insurance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the guaranteed auto protection (gap) insurance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Italy, Spain, Canada.

Guaranteed Auto Protection (GAP) insurance is an additional coverage option that individuals can purchase to safeguard themselves in case their car is stolen or declared a total loss, and the remaining loan or lease amount exceeds the car's value. This insurance is commonly presented as an optional add-on when financing or leasing a vehicle, providing coverage for the outstanding loan balance that is not covered by the primary insurance carrier.

The primary types of Guaranteed Auto Protection (GAP) insurance encompass return-to-invoice GAP insurance, finance gap insurance, vehicle replacement gap insurance, return-to-value gap insurance, and other variations. Return-to-invoice GAP insurance specifically shields the customer financially in scenarios where their vehicle is stolen or deemed a total loss in an accident. This coverage is made available through various distribution channels, including agents, brokers, direct response, and others. The applications of GAP insurance extend to both passenger vehicles and commercial vehicles, serving diverse end-users, including individuals and corporate entities.

The guaranteed auto protection (GAP) insurance market research report is one of a series of new reports that provides guaranteed auto protection (GAP) insurance market statistics, including guaranteed auto protection (GAP) insurance industry global market size, regional shares, competitors with a guaranteed auto protection (GAP) insurance market share, detailed guaranteed auto protection (GAP) insurance market segments, market trends and opportunities, and any further data you may need to thrive in the guaranteed auto protection (GAP) insurance industry. This guaranteed auto protection (GAP) insurance market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The guaranteed auto protection (GAP) insurance market includes revenues earned by entities by providing agreed value gap insurance and contract hire gap insurance. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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