"Will I get enough cash from my claim to help me buy my next car?" "

My 2018 Ford Mustang was just totaled in an accident. I have gap coverage, so I know the bank will pay off the rest of my loan. But I don't have anything saved up for a new down payment for my next car. Will there be anything left over to use as a down payment?

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Shannon Martin
Answered on Apr 30, 2021
Shannon is an expert in personal lines liability insurance with 13 + years of insurance industry experience. She also served as a special insurance liaison to AARP members for 6 of those years. She is a graduate of UL Lafayette and currently resides in NY with her family. Shannon is also an amateur juggler, ukulele player, and is a time travel paradox theory enthusiast.
“It will depend on the current value of your car and what the balance of your loan is. The insurance carrier must pay out the actual cash value of the vehicle and no more than that.
If the gap insurance is activated, this means the vehicle’s value is less than the remainder of the loan. While the bank will be paid the difference, there will not be any cash payout made to you.
If you are paid ahead in the loan, then when the insurance carrier issues the check, it will be for an amount higher than the loan balance, and you will be able to keep the rest! “
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