Can GAP insurance replace my vehicle after an accident?

My car was totaled in an accident and I have gap insurance. Will it pay for a new car?

“The purpose of gap insurance is to pay the difference of what you owe on your loan versus the actual cash value of your vehicle. To this effect, it will not pay for a new vehicle.
If you’re upside down on your car loan, you could end up owing more on your loan than your vehicle is worth. Gap insurance is your protection against this.
For example, if you owe $20,000 on a loan but your car is only worth $18,000, Gap insurance would pay the $2,000 difference that would remain on your loan balance after your car insurance payout.
When you purchase your next vehicle, you may want to consider new car replacement insurance on top of collision and comprehensive coverage. Use the Jerry app to compare rates and get the best rate for your new vehicle.”
Emily Maracle
Answered on Aug 16, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.

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