Gap Insurance: How It Impacts Your Car Loan or Lease

Edmunds.com · July 2012

Gap Insurance: How It Impacts Your Car Loan or Lease

Learn how gap insurance impacts your car loan or lease with Edmunds - Auto Finance tips.

peteramoore48 · July 2012

Be careful what company you choose , we totaled our car and had a 2,200 gap but the gap insurer only covered 20% of the 2,200.

peteramoore48 · July 2012

I won,t say the name of the company on here but if any one wants to know not to chose you can email me.

dpoythress · July 2015

Is it illegal for a dealership to finance GAP Insurance in your finance charges without your authorization of knowledge. This is known practice for some dealerships. I recent purchase a defective car from Atlanta Luxury Motors along with an Extended Warranty provided by GWC Corp which has been a horrible experience. They included GAP Insurance along with the finance charges and also sold me a warranty that GWC Warranty Corp will not honor when it clearly states the repairs are covered. Constantly fighting back and forth with ALM and GWC. There are so many complaints out there about both ALM and GWC Corp.

radhikapradeep · February 2016

I just leased my new Corolla, declined GAP from Toyota hoping to purchase it from State Farm. Unfortunately State Farm does not offer it on lease (they do it on loans). What do I do now? Please help.

Michaell · February 2016

radhikapradeep said:
I just leased my new Corolla, declined GAP from Toyota hoping to purchase it from State Farm. Unfortunately State Farm does not offer it on lease (they do it on loans). What do I do now? Please help.

Contact the Toyota dealer and see what options are available to you. You may have to rework the contract and have a payment increase to include GAP.

eljuliber · February 2016

Does someone knows any relaible independent GAP insurance company provider.?

eljuliber · February 2016

Besides car dealership is too expensive and my GEICO auto insurance don't offer GAP.

tobester1 · June 2016

Just over a month ago I got into an accident with a deer and my car was totaled. Just yesterday. the insurance company paid the bank. I still owe $716 after the check cleared. I filed a claim with the gap provider shortly after I learned the car was a total loss. This week., the insurance company finally sent the gap company the last of the documents it needs to get started on my claim, but there's one thing that the gap people asked about that could mean they won't pay. On the appraisal, the insurance company took $1,130 off the cash value for something called a "reconditioning fee," what it would cost to restore the car in its pre-accident condition to be able to be sold at a dealer. Given that the car is a total loss, I don't understand why that would be deducted. It's going to the junkyard. Second, why would the gap company refuse to pay and is there anything I can do about the situation?

kyfdx · June 2016

tobester1 said:
Just over a month ago I got into an accident with a deer and my car was totaled. Just yesterday. the insurance company paid the bank. I still owe $716 after the check cleared. I filed a claim with the gap provider shortly after I learned the car was a total loss. This week., the insurance company finally sent the gap company the last of the documents it needs to get started on my claim, but there's one thing that the gap people asked about that could mean they won't pay. On the appraisal, the insurance company took $1,130 off the cash value for something called a "reconditioning fee," what it would cost to restore the car in its pre-accident condition to be able to be sold at a dealer. Given that the car is a total loss, I don't understand why that would be deducted. It's going to the junkyard. Second, why would the gap company refuse to pay and is there anything I can do about the situation?

Is this GAP insurance on a finance contract or a lease?

Is it third party GAP insurance?

tobester1 · June 2016

Finanice contract.

Purchased from the dealer.

kyfdx · June 2016

tobester1 said:
Finanice contract.

Purchased from the dealer.

The GAP insurance company thinks your car insurance company should pay more, so they can pay less, and I'm sure the opposite is true, as well.

It's just a matter of money. I hope it turns out well for you, but with two insurance companies involved, I wouldn't bet on it.

tobester1 · June 2016

It's probably a lost cause at this point, but how can I avoid this "reconditioning fee" issue in the future?

stever · June 2016

You may want to ask your state insurance commissioner why you have to pay any fee when you have insurance that's supposed to cover "stuff".

tobester1 · June 2016

There was some rear bumper damage on the car from an accident a few months earlier. I didn;t get around to fixing it because I don't have rental reimbursment coverage on by policy and I was trying to get the at-fault driver's company to pay for it while my car was being fixed. The damage to the bumper was only $360. There was also some wear in the carpet under my gas and brake pedal and the interior wasn't as clean is it probably should have been. While little things can add up, I don't understand how it got to $1,130. I also understand that neither company wants to pay money for pre-existing damage, but for a car that's going to the junkyard and doesn't need to be recondistioned to be sold again, I still don't get why the gap company won't pay.

tobester1 · June 2016

I just received the notice from the gap company. Actually, the issue was called "condition adjustments"
I neded up getting nothing.
Still don't see why the gap company should not pay.

kyfdx · June 2016

tobester1 said:
I just received the notice from the gap company. Actually, the issue was called "condition adjustments"
I neded up getting nothing.
Still don't see why the gap company should not pay.

That sucks.

And, not to denigrate anyone in the business, but I hate insurance companies.

tobester1 · July 2016

I know. I purchased GAP for this very situation. What good is it if it doesn't pay in this situation? I just want to get what I paid for, nothing more, nothing less.

tshort08 · April 2017

I just totaled my 2015 Nissan Altima and my insurance only paid 12,000 of the 25,000. So I thought my GAP insurance that I got through my credit union would pay the remainder 11,3000. Well I was wrong they said GAP will only pay percentage of what is left! Is this normal?

Michaell · April 2017

tshort08 said:
I just totaled my 2015 Nissan Altima and my insurance only paid 12,000 of the 25,000. So I thought my GAP insurance that I got through my credit union would pay the remainder 11,3000. Well I was wrong they said GAP will only pay percentage of what is left! Is this normal?

That seems odd - the whole point of GAP is that it covers the "gap" between what the car is worth ($12,000) and what is owed on the loan ($25,000).

Never heard of a GAP situation that pays only a percentage of that difference. Is the loan also with the Credit Union?

naynay220 · August 2017

I purchased a 2015 and traded in a 2014. the dealership told me that because of my negative equity they could not offer me the GAP insurance. can someone tell me where I can purchase some GAP insurance please?

Michaell · August 2017

naynay220 said:
I purchased a 2015 and traded in a 2014. the dealership told me that because of my negative equity they could not offer me the GAP insurance. can someone tell me where I can purchase some GAP insurance please?

How much negative equity was added to the new loan?

Nina_0213 · October 2019

I got hit in my new car after work at 11:15pm from what the police report states. It was a three car accident. my insurance did not kick in tell midnight smh
Now I have to go through the other guys insurance and since the other guy only has the minimum me and the 3rd car have to split the $5k. I still owe $13k on my car will gap insurance cover the remaining of my car.

Michaell · October 2019

GAP insurance only kicks in if your car is deemed a total loss by your insurance company. Otherwise, the other parties insurance should cover all your repair costs.

Gap Insurance: How It Impacts Your Car Loan or Lease

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