office to another so not too many of my questions can be answered which leaves me in a state of panic I am hoping someone could help alleviate the stress. I have GAP insurance on top of my car insurance. My question is what does the GAP cover. My insurance has already stated that they will be getting the value of my car and paying my loan off. Only thing is they didt state whether they pay the loan off only ro the amount that my car is worth or if they pay the whole things off. The value of my car is more than the pay-off on my insurance that I know for sure. So my question is wut happens now as far as getting another car....do I just start fresh as far getting a new car...go to dealership....get new loan....blah blah blah....or does my insurance or GAP cover any of this?? Im stressing bc I recently started at a new job and only have 3 months in here so if I have to get a whole new loan I dont know who will approve me, my credit is far from great besides the employment history....HELP!
2007-10-02 12:31:04 · 2 answers · asked by freakinout 1 in Cars & Transportation ➔ Insurance & Registration
When your vehicle is a total loss:
The insurance company will appraise the vehicle and determine it's Actual Cash Value (ACV). The acv is what you could have reasonably sold the vehicle for - just prior to the loss- given it's condition, options, mileage. This may or may not be less than your loan. If filing under your collision coverage - the settlement will be the acv - your deductible.
If you are "upside down" - owe more than the car is worth - the gap insurance steps in to pay the difference between the acv and the amount owed.
If you owe less than the car is worth- the first money goes to the bank - any equity goes to you. If you do not have equity in the vehicle - then all the money goes to the bank.
Once you have settled your total loss - you go buy another car- just like you would at any other time. If you have been a good customer - made all your payments on time- your current finance company may be willing to give you another loan for the new vehicle. Ask them.
The insurance company will not purchase a replacement vehicle for you.
Since you know your car is a total loss - it's ok to start looking for a replacement vehicle. You may want to wait to find out what the acv of the wrecked car is before you purchase the replacement - so you know how much money you have to work with - but it's ok to start looking.
2007-10-02 12:47:14 · answer #1 · answered by Boots 7 · 1⤊ 0⤋
The insurance company should pay you the market value of your car, or ACV (actual cash value). If that is below what you still owe the bank then your GAP insurance will 'gap' the difference and pay off the loan. If your vehicle is worth MORE than what you owe then the insurance company will pay the leinholder the balance of what you owe and you will get a check for the remainder. Save some cash, buy a beater and drive it for a year while saving your car payment amount each month. Then it will be time to buy (with cash) a much better car to drive for two or three years. Keep this up and you will be able to buy any car you want and never have to worry about GAP or banks again.
2007-10-02 16:24:41 · answer #2 · answered by Anonymous · 0⤊ 0⤋