With the emerging application of low-level driving automation technology, heterogeneous traffic flow mixed with human-driven vehicles and low-level autonomous vehicles is dawning. In this context, it is imperative to investigate its effect on mixed traffic flow. As a key component for adaptive cruise control (ACC) which is a practical low-level application of driving automation, the time gap policy determines the dynamic of ACC-equipped vehicles and plays a crucial role in traffic flow stability and efficiency. There are two main time gap policies used for ACC at present, namely, constant time gap (CTG) policy and variable time gap (VTG) policy. In this study, we carried out a detailed comparison between these time gap policies to investigate their potential effect on mixed traffic flow, where the analytical- and simulation-based approaches are both considered. Analytical results show that VTG policy is superior to CTG policy in stabilizing the mixed traffic flow. In addition, numerical simulations are also conducted and simulation results further support the analytical results. As for throughput, there is no difference between CTG policy and VTG policy in analytical progress when the same time gap is set at the equilibrium. However, simulation results based on an on-ramp scenario show that the throughput of mixed traffic flow with VTG policy is slightly higher than that of CTG policy. Meanwhile, the scatter of mixed traffic flow with VTG policy in the flow-density diagram gradually clusters in the middle range of density (i.e., 20–40 veh/km) with the increase of the penetration rates of ACC vehicles, where the traffic flow operates more efficiently. These results indicate that VTG policy is better than CTG policy when designing controllers for ACC in the context of traffic flow operation and control.