State Law Guide - Updated January 2026
Texas GAP/VSC Refund Demand Rights
Under Texas Finance Code Chapter 348, Texas gives you the right to cancel and receive refunds on F&I products. Dealers who fail to comply face 10% per month late penalty.
Quick Answer
In Texas, you can cancel dealer add-on products at any time. Refunds must be issued within 46 days. You can sue in Small Claims Court for up to $20,000.
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Key Texas Provisions
| Provision | Requirement | Your Right |
|---|---|---|
| Cancellation Fee | Max $50 | Fee cannot exceed $50 regardless of GAP cost |
| Refund Deadline | 46 days | Refund must be issued within 46 days |
| Late Penalty | 10% per month | Add 10% monthly to refund if late |
| Pro-Rata Refund | Required | Entitled to unused portion minus max $50 fee |
| High Small Claims | $20,000 limit | Can pursue substantial claims without attorney |
Cancellation Fee
Max $50Refund Deadline
46 daysLate Penalty
10% per monthPro-Rata Refund
RequiredHigh Small Claims
$20,000 limitWhat Texas Law Requires
Your Cancellation Rights
Under Texas Finance Code Chapter 348, Texas consumers have the right to cancel F&I products purchased from dealers.After this period, you're still entitled to a pro-rata refund based on unused time or mileage.
Refund Timeline
Once you submit a cancellation request, the dealer or administrator has 46 days to process your refund. Failure to comply may result in 10% per month late penalty.
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Penalty Provisions
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$39 - Avg Texas refund: $550 - Potential 14x return
Frequently Asked Questions
What is the maximum cancellation fee for GAP in Texas?
Texas law caps cancellation fees at $50, regardless of how much you paid for GAP insurance. If a dealer tries to charge more, they're violating Texas Finance Code.
What if my Texas dealer is late refunding my GAP?
Under Texas law, if the dealer fails to refund within 46 days, you're entitled to a 10% per month penalty on the refund amount. This penalty continues until they pay.
Do I get a GAP refund if I pay off my car early in Texas?
Yes. You're entitled to a pro-rata refund of unused GAP coverage minus a maximum $50 cancellation fee. Dealers rarely process this automatically - you must request it.
Where do I file a complaint in Texas?
File complaints with the Texas Department of Motor Vehicles (TxDMV) or the Texas Attorney General Consumer Protection Division.
Texas 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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Based on Texas Finance Code Chapter 348