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Colorado State Guide

Colorado GAP Insurance Refund: Automatic Under C.R.S. § 5-9.3-106

Last reviewed: November 2026

Quick answer: For GAP agreements made on or after January 1, 2024, Colorado law (C.R.S. § 5-9.3-106) requires the original lender to refund the unearned GAP fee when you pay off the loan early or the car is repossessed and sold, without you having to ask, as long as no GAP claim was filed. The refund is the unused share of what you paid. Older agreements are usually refundable too, but you have to ask in writing.

Colorado requires your refund automatically when your loan ends early.

If your loan ended and the refund never arrived, your lender is overdue. You can still demand it in writing.

New to GAP refunds? Learn how a gap insurance refund works, and see how long a GAP refund takes.

What the law says

Colorado's GAP waiver law, C.R.S. § 5-9.3-101 and following (passed as HB23-1181), took effect on January 1, 2024. Section 5-9.3-106 says the original lender must refund the unearned GAP fee when:

  • the loan is paid off before it was due (including a payoff by refinancing, selling or trading in the car), or
  • the car is repossessed and sold by the lender,

and you never filed a claim under the GAP agreement. If your loan was sold to another company, that company must notify the original lender, which has 30 days to pay you. If it doesn't, the company holding your loan pays you and collects from the original lender.

How much you get back

For GAP included in your loan contract, the refund is pro rata: the share of the GAP fee for the time you didn't use. For example, $700 of GAP on a 72-month loan paid off after 24 months leaves 48 of 72 months unused, which is about $467. GAP sold as a separate insurance policy follows Colorado's insurance rules instead.

If you cancel GAP yourself more than 30 days after buying it, the law allows a cancellation fee of no more than $25. See how cancelling GAP works.

Bought GAP before 2024?

The 2024 law doesn't cover older agreements, but older GAP is usually still refundable. Colorado's Attorney General has required lenders and credit unions to refund unearned GAP fees under the state's consumer credit code since 2019, and reports recovering more than $23.5 million for nearly 132,000 Coloradans. For an older agreement, the refund isn't automatic: send a written request to your lender or GAP administrator.

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If your refund is late or refused

File with the Colorado Attorney General

The Attorney General's office enforces Colorado's consumer credit code, including GAP refunds. File at coag.gov/file-complaint. If your lender is a national bank, you can also complain to the federal CFPB at consumerfinance.gov/complaint.

And if we send your request for you and no refund comes through, you owe nothing beyond the $29. The 25% fee is only charged when your refund arrives.

Frequently asked questions

Is the Colorado GAP refund automatic?

Yes, for GAP agreements made on or after January 1, 2024. If you pay off the loan early, or the car is repossessed and sold, the original lender must refund the unearned GAP fee without you asking, as long as you never filed a GAP claim.

How is the Colorado refund calculated?

For GAP sold as part of the loan contract, the refund is pro rata: the unused share of what you paid. GAP sold as an insurance policy follows Colorado's insurance rules instead.

How long does the lender have to pay?

If your loan was sold to another company, that company must tell the original lender, which then has 30 days to pay you. If it doesn't, the company holding your loan must pay you instead.

My GAP was bought before 2024. Am I still owed a refund?

Very likely. The 2024 law doesn't cover older agreements, but Colorado's Attorney General has required lenders to refund unearned GAP fees since 2019 under the state's consumer credit code, recovering more than $23.5 million for nearly 132,000 Coloradans. Your contract usually promises the refund too. You'll need to ask for it in writing.

Check your Colorado refund

Our free calculator applies Colorado's rules to your dates and GAP price and estimates your refund in about two minutes.

Important Notice

This page is general information about Colorado law, not legal advice. GapInsuranceRefunds.com is a document-preparation and claim-assistance service, not a law firm. Refund amounts depend on your contract terms, dates, and individual circumstances. Primary authority: C.R.S. § 5-9.3-106.

See how your state compares: GAP refund laws in all 50 states.