Originally Posted by PQ
And this is what GAP insurance is for.
Also why I said the dealer should have made it right in the beginning with a new identical car and had the customer agree that any compensation is the dealers. From either insurance company.
GAP insurance covers the difference between what the insurance is paying out on the car and what you still owe on your car loan. So if he owed 50K on his car loan and the insurance was going to give him 40, the GAP insurance would cover that extra 10K to pay off the loan. If he only owed 30K on the car, GAP insurance wouldn't kick in.
GAP insurance is generally for those that put little or nothing down on a car to help cover the immediate depreciation hit in case the car is totalled.