Gap Insurance Question 150 LTV

[TattnallTrio]

Hi Everybody,
My best friend traded his car in for a brand new 2020 Dodge Grand Caravan with huge rebates... however, he traded a car with $9k negative equity into the new loan. The GAP insurance that the dealer sold only covers 120% of Actual Cash Value.... I don't think this is sufficent. Does anyone have any ideas? I want them to be protected if something happens. Progressive offers Gap but the limit is whatever the car is worth, plus 25%... which is better.... although I wonder if there are GAP policies that cover the entire thing, if something goes wrong. Refinancing the vehicle isn't an option for them right now.

[mich800]

I doubt you will find insurance with unlimited coverage.  Those limits are put in place for the exact reason of limiting policy holders rolling huge negative equity into a loan without risk.  It is to protect from depreciation not a bad financial arrangement.

[4sallypat]

How about getting an additional umbrella insurance policy to cover the car ?

[Loquat]

The best thing your friend can do is aggressively pay down the vehicle to the point of equity. Hoping to find a lender GAP provider that's going to cover whatever bloated amount of a loan will be as hard as finding a teardrop in the ocean.

I can't think of any company that would willingly take such a risk. Not saying that there isn't one...I'm just not aware of such as I was a Finance Manager for a large automotive network for many years.