California GAP Refund Law: Your Rights Under AB 2311

What AB 2311 changed

Effective January 1, 2023, Assembly Bill 2311 (codified in California Civil Code) set rules for GAP waivers sold with vehicle financing. The key protections:

• 30-day free look: Cancel within the first 30 days and you're entitled to a full refund.
• Prorated refund after 30 days: Cancel later and you're owed the unearned (unused) portion of the GAP price.
• No cancellation fee: California prohibits charging a cancellation fee on GAP either way.
• Refund deadline: Providers must issue the refund within 60 business days.
• Penalty for violations: If a provider fails to refund as required, the consumer may recover three times the GAP charge.

This is far more consumer-friendly than the default in many states, where cancellation fees are allowed and timelines are vaguer.

Who qualifies for a refund

You likely have an unclaimed GAP refund in California if any of these happened before your GAP term ended:

• You paid off your auto loan early
• You refinanced with a new lender
• You traded in or sold the vehicle
• The vehicle was totaled (GAP pays the deficiency, but unused premium on other add-ons is often still owed)
• You simply cancelled the coverage voluntarily

How to claim your California GAP refund

• Find your GAP addendum — the separate document signed at the dealership listing the GAP price and provider.
• Identify the provider (the administrator, not your car insurer) and the triggering event date.
• Submit a written cancellation request with proof of the triggering event (payoff letter, refinance confirmation, trade-in paperwork).
• Hold them to the 60-business-day clock and the no-fee rule. If they miss it or charge a fee, note the treble-damages provision.

How much can you expect?

Because California bars cancellation fees, your refund is the full unearned portion. On a $900 GAP waiver for a 60-month term cancelled at month 24, roughly 60% of the term is unused — about $540, with no fee deducted.

Common questions

Does California allow a GAP cancellation fee?

No. Under AB 2311, no cancellation fee may be charged on a GAP waiver.

How fast must I be refunded?

Within 60 business days of a valid cancellation.

What if the dealer or provider ignores my request?

Document everything in writing. California's treble-damages provision lets consumers recover three times the GAP charge when a provider violates the refund rules. You can also file with the California Department of Insurance or the DMV.

This page is general information about California's GAP refund statute, not legal advice. Your specific rights depend on your contract and circumstances.