GAP Refund Laws by State

No federal floor, so the state row is the whole rule

The finance office charged you for GAP across the whole loan, up front, and rolled it into what you borrowed. When the loan ended early, part of that charge went unearned. Whether the lender has to send it back on its own, or can hold it until you ask in writing, and for how long, depends on the state you live in. Most lenders will not explain this to you. This table does.

No federal statute requires a refund of the unearned GAP charge when a car loan ends early. The federal rules that exist, 12 CFR part 37 for national banks and 12 CFR 721.3 for federal credit unions, govern debt cancellation products those lenders sell themselves, and this table did not read them. For the GAP addendum a dealer sold you and assigned to a finance company, which is how most of it is sold, the state row is the entire statutory rule. In 16 jurisdictions that row is empty and the waiver’s own cancellation clause is all you have. GAP is not a warranty and not a vehicle service contract; the extended warranty rules have their own table.

Every one of the 51 rows below was read from the statute itself, in the state’s own code where its site would open and otherwise on Justia, and then read a second time, section by section, before this page was written. The second read moved one row, Texas, and the section at the end says how. None of it was taken from the refund-for-a-fee sites that rank for this search, which profit from you believing this is hard. The rule for this page was to go to the statute or say nothing.

The headline findings. Thirteen states make the refund automatic: the creditor, holder, seller or dealer must refund or credit the unearned fee after an early payoff without a request from you. That is ten more than the GAP refund page could name when it was written, because that page would not call a state automatic until the statute had been read. Twenty-two states put the duty on you to ask in writing, and 21 of them cut the request off 90 days after the payoff. Sixteen jurisdictions have no GAP refund statute at all. Five states allow no cancellation fee, eight cap it between $25 and $75, and the rest say nothing.

The thirteen automatic states

The automatic states split into two generations. The older rules sit in consumer credit codes and were written for any product that dies with the loan. Missouri’s 408.380, from 2011, says any refund on early termination “shall be paid or credited promptly” by the pro rata method, with a 15-day full-refund window. Iowa’s 537.2510 makes the dealer refund voluntary debt cancellation coverage directly to you within 60 days of hearing from the creditor that you prepaid. Wyoming’s 40-14-454 gives the creditor 60 days after termination to “facilitate” any refund otherwise owed, pro rata unless a rule says otherwise. Indiana’s 24-4.5-2-202 says GAP “is automatically terminated” on prepayment in full and the seller must issue a refund no less favorable than pro rata. Vermont’s 10405 makes the creditor refund any unearned fee on termination by a formula disclosed when you signed, at least as favorable as the actuarial method, with no request step. Wisconsin’s 218.0148 terminates the waiver on payoff and owes a partial refund calculated no worse than the rule of 78s.

The newer rules are GAP-specific and name a deadline. Texas Finance Code 354.007 makes a refund due on prepayment in full and gives the holder 60 days to refund or credit it, or 30 days to instruct the administrator in writing, who then has 30 days. California’s 2982.12 terminates the waiver on payment in full and gives the holder 60 business days to tender the refund, pro rata after the first 30 days, full inside them, and forbids any cancellation fee. New Jersey’s 17:16BB-6, amended in 2019, requires the creditor to provide the pro rata refund within 60 days of the event terminating the loan “without requiring the borrower to request the refund,” less a fee of up to $50. Alabama’s 8-37-6, from 2017, uses the same sentence and the same 60 days and $50. Connecticut’s 36a-789, in force for waivers signed from January 1, 2024, requires the refund within 60 days “without requiring the borrower to request the refund,” caps the fee at $50, and does not reach a waiver sold by a bank or credit union. Colorado’s 5-9.3-106, also from January 1, 2024, makes the original creditor refund the unearned fee on prepayment if no claim was made; if the loan was sold, the current holder asks the original creditor for you and the original creditor has 30 days, after which the holder must pay you and collect from the originator. Loans made before 2024 in Colorado sit under Rule 8 of the consumer credit code rules, which also required the creditor to refund without a request.

Oregon is half automatic. ORS 646A.781 requires a written application within 90 days if you cancel the waiver yourself, but when the waiver is canceled because the finance agreement terminated, the refund “shall be provided without requiring the borrower to apply.” A payoff is a termination, so the payoff refund is automatic and a mid-loan cancellation is not.

One thing every automatic statute allows: the creditor may apply the refund to whatever you still owe. If the loan is paid in full there is nothing to apply it to and the refund has to reach you, which is the sentence to quote when a servicer says it “credited” a closed account. Do not let them keep it on a technicality. The who owes the refund page covers that argument.

The twenty-two request states

Twenty of these states have adopted the GAP Waiver Model Act in some form since 2008, and the cancellation section reads nearly the same in each. After the free look, “the borrower may be entitled to a refund of any unearned portion of the purchase price of the waiver unless the waiver provides otherwise,” and “in order to receive a refund” the borrower “must provide a written request to the creditor, administrator, or other party” within 90 days of the event terminating the finance agreement. Georgia, Michigan, Mississippi, Montana, Nebraska, New Hampshire, North Carolina, Oklahoma, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington and West Virginia carry that language. Arkansas, Maine, Minnesota, Nevada and North Dakota are firmer, “shall be entitled” or “must refund,” but keep the written request and the 90 days. Florida’s 520.07 keeps both too, with a $75 fee cap. Louisiana requires the written request and sets no clock.

Three things follow. The 90 days is a real cutoff, and a lender in these states can lawfully refuse a request sent on day 91. Nobody at the lender will remind you the clock is running. The words “unless the waiver provides otherwise” mean the waiver can be sold as noncancelable after the free look, a term few buyers are told about at signing, so read yours; Nebraska and Florida require that a no-refund waiver be offered next to a refundable one, and Nevada requires the waiver to be cancelable after the free look. And the request has to be in writing to the party the waiver names, which is often the administrator and not the lender that sent your payoff letter.

The method floors sit in this group too. Louisiana and North Dakota require a refund no less favorable than the rule of 78s, a sum-of-the-digits method that front-loads the earned share, so an early payoff returns less than pro rata would. Nebraska requires at least the actuarial method. Maine requires pro rata. Everywhere else in the group the waiver’s stated method governs. North Dakota caps the fee at $50, Arkansas, Florida and Oklahoma at $75, and Louisiana and South Carolina allow none.

The table

Verified 35 of 51, meaning a refund rule was read in the statute. The 16 rows marked “no GAP refund statute found” were searched in the state’s credit, insurance and consumer codes and the note behind each row says what was read. Every row with a rule links to the statute text that was read. The Deadline column is the creditor’s deadline to pay, which only the automatic states set; the request states set your deadline to ask instead, in the Refund column.

State	Refund on early payoff	Deadline to pay	Who owes it	Method	Fee cap	Statute
Alabama	Automatic on early payoff, no request needed	60 days	Creditor (the lender or holder)	Pro rata	$50	Ala. Code 8-37-6
Alaska	No GAP refund statute found					None located
Arizona	No GAP refund statute found					A.R.S. 20-103(F)
Arkansas	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	$75	Ark. Code 4-90-806
California	Automatic on early payoff, no request needed	60 business days	Creditor (the lender or holder)	Pro rata	No fee allowed	Cal. Civ. Code 2982.12(b)
Colorado	Automatic on early payoff, no request needed	No deadline set	Creditor (the lender or holder)	Pro rata	$25	C.R.S. 5-9.3-106; 4 CCR 902-1 Rule 8(h) for transactions before January 1, 2024
Connecticut	Automatic on early payoff, no request needed	60 days	Creditor (the lender or holder)	Pro rata	$50	Conn. Gen. Stat. 36a-789
Delaware	No GAP refund statute found					18 Del. C. 917, 918
District of Columbia	No GAP refund statute found					None located
Florida	On written request within 90 days of payoff	No deadline set	Creditor (the lender or holder)	As the waiver states	$75	Fla. Stat. 520.07(11)(g)
Georgia	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	No cap set	O.C.G.A. 33-63-7
Hawaii	No GAP refund statute found					None located
Idaho	No GAP refund statute found					None located
Illinois	No GAP refund statute found					815 ILCS 375/9.03
Indiana	Automatic on early payoff, no request needed	No deadline set	Seller (the dealer)	Pro rata	No cap set	Ind. Code 24-4.5-2-202(4)(f), (g)
Iowa	Automatic on early payoff, no request needed	60 days	Seller (the dealer)	Not specified	No cap set	Iowa Code 537.2510(1), (10)
Kansas	No GAP refund statute found					None located
Kentucky	No GAP refund statute found					2026 Ky. Acts ch. 16 (SB 158), Section 5, new KRS ch. 367 sections; effective January 1, 2027
Louisiana	On written request	No deadline set	Creditor or administrator, whichever the waiver names	No worse than the rule of 78s	No fee allowed	La. R.S. 6:969.53
Maine	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	Pro rata	No cap set	10 M.R.S. 1500-H(5)
Maryland	No GAP refund statute found					None located
Massachusetts	No GAP refund statute found					M.G.L. c. 255B, s. 14 (Division of Banks opinion of February 10, 2022)
Michigan	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	No cap set	MCL 492.29
Minnesota	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	No cap set	Minn. Stat. 59D.07
Mississippi	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	No cap set	Miss. Code 83-52-11
Missouri	Automatic on early payoff, no request needed	No deadline set	Not specified	Pro rata	No cap set	Mo. Rev. Stat. 408.380(2), (3)
Montana	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	No cap set	Mont. Code 30-14-2206
Nebraska	On written request within 90 days of payoff	No deadline set	Creditor (the lender or holder)	No worse than the actuarial method	No cap set	Neb. Rev. Stat. 45-1106
Nevada	On written request within 90 days of payoff	No deadline set	Creditor (the lender or holder)	As the waiver states	No cap set	NRS 690D.200
New Hampshire	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	No cap set	N.H. RSA 361-E:5
New Jersey	Automatic on early payoff, no request needed	60 days	Creditor (the lender or holder)	Pro rata	$50	N.J.S.A. 17:16BB-6
New Mexico	No GAP refund statute found					None located
New York	No GAP refund statute found					None located
North Carolina	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	No cap set	N.C.G.S. 66-445
North Dakota	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	No worse than the rule of 78s	$50	N.D.C.C. 26.1-57-06
Ohio	No GAP refund statute found					Ohio Rev. Code 1317.05(B)
Oklahoma	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	$75	15 O.S. 140.4(F)
Oregon	Automatic on early payoff, no request needed	No deadline set	Creditor or administrator, whichever the waiver names	Pro rata	No cap set	ORS 646A.781
Pennsylvania	No GAP refund statute found					None located
Rhode Island	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	No cap set	R.I. Gen. Laws 19-32-6
South Carolina	On written request within 90 days of payoff	No deadline set	Creditor (the lender or holder)	As the waiver states	No fee allowed	S.C. Code 37-30-150
South Dakota	No GAP refund statute found					SDCL 58-1-3(9), 54-4-73
Tennessee	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	No cap set	Tenn. Code 56-59-106
Texas	Automatic on early payoff, no request needed	60 days	Creditor (the lender or holder)	Not specified	No cap set	Tex. Fin. Code 354.007
Utah	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	No cap set	Utah Code 31A-6b-303
Vermont	Automatic on early payoff, no request needed	No deadline set	Creditor (the lender or holder)	No worse than the actuarial method	No cap set	8 V.S.A. 10405(c)(11)
Virginia	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	No cap set	Va. Code 38.2-6404
Washington	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	No cap set	RCW 48.160.060
West Virginia	On written request within 90 days of payoff	No deadline set	Creditor or administrator, whichever the waiver names	As the waiver states	No cap set	W. Va. Code 33-4-23(j)
Wisconsin	Automatic on early payoff, no request needed	No deadline set	Creditor (the lender or holder)	No worse than the rule of 78s	No fee allowed	Wis. Stat. 218.0148(4)
Wyoming	Automatic on early payoff, no request needed	60 days	Creditor (the lender or holder)	Pro rata	No cap set	Wyo. Stat. 40-14-454

The sixteen with no rule

Alaska, DC, Hawaii, Idaho, Kansas, Maryland, New Mexico, New York and Pennsylvania have no GAP waiver statute that could be found in their credit, insurance or consumer codes; in several of them the service contract act was read and confirmed not to reach GAP. Arizona, Delaware, Ohio and South Dakota have a statute that defines GAP or a debt cancellation contract and says it is not insurance, and stops. Illinois mentions a debt cancellation contract only to require the dealer to disclose what it is paid for selling one. Massachusetts has no GAP act; its Division of Banks has read the retail installment statute to bar any GAP cancellation fee, which is a regulator’s opinion rather than a statute and sets no refund duty. Kentucky has nothing in force today, but SB 158, enacted in 2026, brings the model act’s written-request rule, a 30-day free look and a $75 fee cap into effect on January 1, 2027.

In all 16 the waiver itself is the rule, and nearly every GAP addendum sold through a dealer promises a pro rata refund of the unearned charge on early termination, because the same form is sold in the 35 states that require it. Write to the party the addendum names, enclose the payoff letter, and cite the addendum’s own refund clause. If nothing comes back, the CFPB takes vehicle loan complaints from every state, and the complaint page has what to send.

What the second read changed

One row. Texas Finance Code 354.007 had been recorded as requiring a pro rata refund. On the second read the section says the holder must refund or credit “an appropriate amount” of the fee, and the administrator’s share “proportional to the amount received,” and names no formula; the method lives in the Office of Consumer Credit Commissioner’s rules, which this run did not read. The row now says the method is not specified in the statute. The triggers, the 60-day deadline, the 30-day instruction route and the no-fee rule all held. Every other verified row held on its second read, including the two 2024 statutes, Colorado’s and Connecticut’s, whose effective dates and bank exclusions were checked against the text.

How to use this

Find your state and read the Refund column first. If it says automatic, note the Deadline column, wait that long from the payoff date, and then write to the party in the Who owes it column citing the section in the Statute column. If it says on written request, send the request now, because the 90 days runs from the payoff and not from the day you learned about the refund, and the lender is under no duty to tell you. If it says no statute found, the waiver’s cancellation clause is the rule; read it and write to the party it names. In every state, if the loan is paid in full, ask for a check, because there is no balance to credit. This is general information about the statutes as they read on September 16, 2026, not legal advice, and a state legislature can change any row above.