What to do if you don’t have GAP insurance on your car loan


Click here to get an approval and pay off your GAP

GAP insurance covers the difference between what you owe on a car and the value.

If you are like most Americans, in the early stages of an auto loan, you owe more than the car is worth.

In the event you total your car and the insurance company only pays off what the car is worth (NADA value or Kelly Blue Book value) but you still owe more after the insurance company pays your bank loan; that is called your GAP.

Most lenders/banks offer gap insurance automatically and offer a waiver if you want to decline, so chances are you may have GAP insurance if you don’t remember signing a GAP waiver when you did you paperwork when you picked up your new car.

Click Here for NYS laws on GAP Waivers and Lending

Here is what you can do if you find yourself in a GAP situation; 

  1. Pay if off out of your pocket
  2. Roll what’s left into your new car purchase – your vehicle options may be limited because of the loan-to-value, but this will give you time on paying the balance down while in a dependable vehicle.
  3. Default completely and charge the auto loan off (we do not recommend this option for it will be devastating to you credit and you will make it almost impossible.)


Click here to get an approval and pay off your GAP

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