State Law Guide
If you paid off your loan early, you may be owed a GAP refund.
Indiana GAP Insurance Refund Guide
Under Indiana Uniform Consumer Credit Code (GAP agreement provisions), Indiana consumers who pay off auto loans early are entitled to pro-rata GAP and warranty refunds. Dealers who fail to comply face Civil penalties of up to $10,000 per violation from the Department of Financial Institutions, and a court-set penalty if a refund due is refused after demand (Ind. Code § 37-2-6-9).
Quick Answer
In Indiana, you're entitled to a pro-rata refund of unused GAP insurance and warranty products when your loan is paid off early. You can sue in Small Claims Court for up to $10,000.
Paid off your auto loan early in Indiana?
Check your rights under Indiana law
Key Indiana Provisions
| Provision | Requirement | Your Right |
|---|---|---|
| Free Look Period | At least 30 days | Every GAP agreement must include a free-look period of at least 30 days (formerly Ind. Code §§ 24-4.5-2-202(4)(e)(viii), 24-4.5-3-202(3)(e)(viii)); the Department of Financial Institutions treats a refund on cancellation during it as required even for GAP costing $400 or less (DFI Advisory Letter 2026-01) |
| Refundable GAP Over $400 | Required if the charge exceeds $400 | If your GAP charge was more than $400, you may cancel and obtain a refund of the unearned GAP charge (Ind. Code §§ 37-2-3-5, 37-2-4-5, formerly § 24-4.5-2-202(4)(f)) |
| Refund Calculation Over $400 | No less favorable than pro rata | If your GAP charge was more than $400, the refund must be calculated by a method no less favorable to you than pro rata; the Department of Financial Institutions does not allow the Rule of 78s or cancellation fees for these agreements (formerly Ind. Code § 24-4.5-2-202(4)(f)(i); DFI GAP guidance, Apr. 2, 2018) |
| Auto-Refund on Payoff | Refundable GAP (over $400), no request needed | When you prepay the loan in full, GAP coverage terminates automatically and the seller must issue the refund; the Department of Financial Institutions expects the seller, creditor or assignee to refund promptly (formerly Ind. Code § 24-4.5-2-202(4)(g); DFI Advisory Letter 2026-01) |
| GAP of $400 or Less | Contract governs | A GAP agreement costing $400 or less may be non-refundable after the free look unless the agreement itself provides a refund (DFI Advisory Letter 2026-01) |
| Refund Refused After Demand | Ind. Code § 37-2-6-9 | If a refund is due and not made within a reasonable time after your demand, a court may award a penalty of up to the greater of the finance charge or ten times the excess charge, and may award reasonable attorney's fees (formerly Ind. Code § 24-4.5-5-202(4), (8)) |
| Department of Financial Institutions | Administers the GAP provisions | The DFI Consumer Credit Division administers the GAP rules and can impose civil penalties of up to $10,000 per violation (formerly Ind. Code § 24-4.5-6-113(3)) |
Free Look Period
At least 30 daysRefundable GAP Over $400
Required if the charge exceeds $400Refund Calculation Over $400
No less favorable than pro rataAuto-Refund on Payoff
Refundable GAP (over $400), no request neededGAP of $400 or Less
Contract governsRefund Refused After Demand
Ind. Code § 37-2-6-9Department of Financial Institutions
Administers the GAP provisionsWhat Indiana Law Requires
Your Refund Rights
Under Indiana Uniform Consumer Credit Code (GAP agreement provisions), Indiana consumers who pay off auto loans early are entitled to pro-rata refunds on unused GAP insurance and warranty coverage. You're entitled to a pro-rata refund based on unused coverage time.
GAP coverage is often refundable after an early payoff, a refinance, or a total loss on which GAP paid no claim — but the contract, state law, and unused coverage determine the amount.
A formal demand letter citing your state's exact statutes is harder to ignore than a generic email.
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Frequently Asked Questions
Do I get a GAP refund if I pay off my car early in Indiana?
Yes, if your GAP charge was more than $400. When you prepay in full the GAP coverage ends automatically and the seller must refund the unearned charge, calculated no less favorably than pro rata (Ind. Code §§ 37-2-3-5, 37-2-4-5, formerly § 24-4.5-2-202(4)). A GAP agreement costing $400 or less may be non-refundable unless it promises a refund.
What is the $400 threshold for GAP refunds in Indiana?
Indiana makes a GAP agreement refundable when its charge exceeds $400: you can cancel and get the unearned charge back, figured at least pro rata, with no cancellation fee. At $400 or less the agreement may be non-refundable after the free look unless its own terms promise a refund (DFI Advisory Letter 2026-01).
How is the Indiana GAP refund calculated?
For a GAP charge over $400, the refund must use a method no less favorable to you than pro rata, and the Department of Financial Institutions does not allow the Rule of 78s (Ind. Code §§ 37-2-3-5, 37-2-4-5; DFI GAP guidance, 2018). For a GAP agreement costing $400 or less, any refund follows the agreement's own terms.
Where do I file a complaint about a GAP refund in Indiana?
File complaints with the Indiana Department of Financial Institutions (DFI) or the Indiana Attorney General Consumer Protection Division.
Indiana Regulatory Contacts
If you need to file a complaint or seek assistance, contact these official agencies:
Contact information is provided for reference. Verify current details on official agency websites.
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Optional letter only if you act · Indiana Uniform Consumer Credit Code (GAP agreement provisions)