Not everyone can afford to purchase the car they want in cash. Most vehicle purchases involve financing. If you bought your car with an auto loan, you might not own it outright for 3-6 years. Between your auto loan’s interest rate and your car’s depreciation, you could end up upside down on your loan, meaning you owe the lender more than your car is worth. This typically happens when someone buys a brand-new car without a down payment.
It could be disastrous if your car is totaled and you owe more than its estimated value. The insurance company will not pay you more than the car is worth. You will still owe the lender any outstanding balance, and anything above the insurance payment will be out of pocket.
Lenders and auto insurance companies often push gap insurance to protect you from owing more on your car than it’s worth in case of a total loss. If you skipped the gap insurance and later realize you’re upside down on your loan, you can correct that by refinancing or making extra payments. However, there’s not much you can do about your loan after your car is totaled But we can help you get the most out of your car and or in rear instance keep it from totaling in the advent it close without forgoing safety