GAP Insurance ?

[Anonymous]

Just curious. If you purchase a car without GAP insurance, car gets totaled, and you still owe lets say 3K on it, can you roll it into a new loan? Or if you don't have the means to pay it off does it count a a repo? I did purchase GAP but curious. Thanks.

[Anonymous]

I'm not sure what happens when you get gap but When it happend with my parents they had to pay it off themselves then went looking for a new car Again, I'm not certain and just what my parents has to do about 5 years ago hopefully someone knows for sure. I do know if you owe the 3K on it and you don't pay it at all then I'm sure it was look as a repo or a chargeoff.

I also bought gap through my CU for $199. I only financed the price of the car since I cancelled my extended warranty and I paid $1500 upfront to cover pretty much the TT&L but I didn't know if getting Gap would be good or not in my case but since it was only $199 I bought it you just never know I guess.

[Anonymous]

If you purchase a car without GAP you are responsible for anything that the insurance company does not pay to the creditor so in your example if that gap is 3k than you are paying 3k on a car you don't owe.  You can't roll that into another loan, dealers "roll" negative equity into deals by artifically lowering the price of the new car or increasing the trade in value of your car so the finance company will carry the loan because all they care about is the LTV ratio of the deal.  In your scenario there is no legal way to roll this debt in.  Theoretically you could find a car with a big rebate and use your rebate money to pay off the other car loan or continue to pay payments on a car you no longer owe.  If you have a gap, then GAP insurance is a good deal if you buy it at a reasonable price, I got mine from NFCU for $199 which as well worth it just in case.  My current gap is about 3k but I hope I never have to use GAP insurance.

Hope this helps

[phillyguy12]

You can not roll the amt into a new vehicle loan. You are responsible for the amt outstanding and depending on the lender it could become immediately due to the fact the security interest is gone but more than likely they will work w. you. In my case my first car purchase i didn't have gap ins and my car was totaled 6 months in. Initially my cu took the insurance payment and treated it like i prepaid the loan so i didn't have a pmt due for a long time. After a few months they called me and said this was a mistake and i need to make pmts so the just adjusted my pmt amt to pay off the bal over the remaining term of the loan

[TRC_WA]

I got loan/lease payoff from Progressive.

$17 per month and pays 25% of actual cash value of vehicle after the claim.  99.9% of the time this is enough to cover any negative equity assuming you got your loan with a decent interest rate.

I keep the LLP coverage until I am out of the red with my new car loan...  ($41k Challenger purchased $0 down)

At $17 a month it would take 47 months for me to pay the $795 the dealer wanted for GAP.

I will be out of negative equity long before then... which is why I didn't buy GAP from the dealer.

[SamsungHDTV]

IF you are going to buy GAP, you have to price shop just like you would the actual vehicles. Dealerships add huge margins to GAP, warranties, and other insurances. The mark up can be up to 100% in cases. So there is plenty of room to negotiate that price. Better yet, find your GAP insurance from somewhere else.

[RussianPassion]

There are instances where you can... For example, your car got into a huge wreck and you know or were told that it would get totalled. Even through it is "totalled" you can still trade it in even if it is missing 4 wheels. Any vehicle has value no matter what condition it is in. Of course the value will suffer but as with any trade in vehicle you can roll the negative into the new loan. Sometimes dealers will take wrecks on trade. There are many reasons why they would do that. That would be the ONLY case where you can roll your negative into a new loan after your car has been wrecked. 

However, if you put in a claim with your insurance already and they totalled it, then its a different case.