Anyone know anything about GAP automobile coverage which pays what insurance will not if a total loss occurs?

Answer 1

It is a good thing to have. Say you finance your car for a total of $23,000.00 a portion of that is finance charges and the car gets totaled, your regular insurance is only going to cover what the car is worth which is going to be substantially different than what you owe to the lender and you will be stuck with having to cover that difference and that is when the gap insurance come into play, it will cover the difference and you will have a clean slate. i hope that explained it well.

Answer 2

GAP insurance pays the difference in the car's value and what you owe on the note. For example, if you owed $9500, and totaled the car, but stilled owed $10,000 on the note, GAP would pay the difference. However, if you have deferred a payment, or behind on the payments, it will not pay that.
But, you say, "How can I owe more on a car than what it is worth?" If you have bad credit, and have to pay a high interest rate, you will be paying more on the interest and less on the principal for a long time. After you have paid on the note for 2 years, you still owe more than the car is worth. It is rare these days to have a note where all the interest is paid off before any is applied to the principal, but in that case, you would also owe more than the car is worth.

Answer 3

I do! I've sold it. When you buy your car, you can opt for "gap" coverage on your regular insurance policy. It increases the cost of collision and comprehensive coverages by about 30%. It pays the difference between your loan payoff and the actual cash value of your vehicle, if you should total the car while "upside down" on the financing.

Answer 4

here you go.