How GAP payout effects credit?

Anonymous · ‎09-17-2016

I financed a work truck 2 years ago, and insurance is totalling it. I have GAP coverage through GM/ALLY, and NOT the insurance company, so I understand that Insurance will be cutting a check to my finance company for their portion of the vehicle, and that my GAP policy then kicks in (takes a few weeks I'm sure) and pays off the remainder.

So assuming I want to go finance another vehicle AFTER my insurance pays the bulk of the loan, but BEFORE the GAP check pays off the difference (loan vs value), what will this process look like from a credit perspective?

Does it look like I just paied off my truck in 2 payments? Or is there some kind of indicator that this was paid off as the result of a total loss by the insurance company?

Anonymous · ‎09-18-2016

@Anonymous wrote:
I financed a work truck 2 years ago, and insurance is totalling it. I have GAP coverage through GM/ALLY, and NOT the insurance company, so I understand that Insurance will be cutting a check to my finance company for their portion of the vehicle, and that my GAP policy then kicks in (takes a few weeks I'm sure) and pays off the remainder.

So assuming I want to go finance another vehicle AFTER my insurance pays the bulk of the loan, but BEFORE the GAP check pays off the difference (loan vs value), what will this process look like from a credit perspective?

Does it look like I just paied off my truck in 2 payments? Or is there some kind of indicator that this was paid off as the result of a total loss by the insurance company?

It really shouldn't matter. If you still have a balance after the bulk of the loan is paid off you shouldn't gave an issue getting a loan for another one. If it comes up then you just have to explain what's happening. People finance new cars all the time when they trade in their existing ones and a full loan shows on their credit report and it's not an issue. You won't have any problems.

sccredit · ‎09-19-2016

It shouldn't be an issue. If they ask explain that your vehicle was totaled and you have GAP to cover the balance.