How does GAP insurance work? Someone I know wants to get "rid" of a lemon that keeps breaking down by the hour

Question

If the car still officially belongs to the finance company, does the person making the payments get any money if the car disappears, or is it just payed off. And please don't mention anything about ethics or breaking the law, because selling a f#$ing lemon to customers should be unethical and against the law. It's really unfair to set people up with garbage cars.

Answer 1

When a financed vehicle is totaled or "disappears" the insurance company may not pay out an amount equal to the balance of the loan.That's where gap insurance comes in.It pays the difference so that the owner of the vehicle isn't stuck paying for a vehicle that they no longer have.Your friend will get out of his monthly payments,but he won't make any money off this deal.
Tell your friend to check your states Lemon Laws before he drives the car into a lake.....In Maryland the dealer has 4 chances to fix a car that keeps breaking down.But there's a catch! It has to be the same problem each time,and it has to be within 12 months or 15,000 miles of original purchase.
Even after all that you have to notify the manufacturer in writing that you are invoking the lemon law.Then they get 1 chance to fix the car.If it breaks down again they have to either give you a new car or a refund.If the problem is with the brakes or the steering then the dealer gets only 1 chance before they have to make good! Again,this is in Maryland!
If you're lucky you might just be offered a new car or refund without having to go all the way with this.Most dealers will fight tooth and nail,until they see that they have no choice in the matter,but there are a few out there with integrity who will do the right thing!

Answer 2

GAP insurance only covers the difference in cost between the amount needed to repair your vehicle and the amount needed to replace the vehicle. This is protection in case of accident and is generally offered through your finance co. or bank.

The insurance you need info on is the coverage thru your standard car insurance co. That is who's going to pay if the car turns up torched somewhere in the desert.

Answer 3

the insurance company offer you a settlement ,which is always less than the finance outstanding on car .say you owe £4000.you write the car off and the insurance offer you £3000.the gap insurance pays the £1000 diference

Answer 4

Lemon Laws have time frames and vary widely by state! You would have to research your circumstances to answer the question correctly.
If I'm reading into this correctly, the penalty for insurance fraud these days is pretty stout! Might want to give that considerable thought??????????
I do sympathize with you however and agree along the line of your thoughts! If we are going to be scammed by the millionaires and billionaires then it's only fair we pay them back with restitution of our own choosing! DOLLAR for DOLLAR!!!!!!!!!!