Can Gap Insurance be used if repair costs exceed the value of a vehicle?? (Vehicle NOT in an accident)?

by on May 15, 2010

Loan amount remaining about 12k. Dealer(s) only offering between 3-6k for trade-in. Vehicle needs new Transmission, extended warranty company refusing to pay. Have gap insurance, but am under the impression that this only kicks in if vehicle is stolen or totaled. Any information would be greatly appreciated…do not want to start my next auto-loan 6k in the hole!!!


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{ 2 comments… read them below or add one }

Jihn May 15, 2010 at 5:01 pm

No, insurance will only cover losses stemming from a sudden and accidental event (aka Car Accident, Hail, theft, etc). If you look through the wording of your policy you will notice that normal wear and tear and maintenance is specifically excluded from being covered.
Sorry. You will need to finance the upside-down amount into your new vehicle or have it repaired and keep the existing vehicle.

oklatom May 15, 2010 at 5:01 pm

GAP insurance makes up the difference between what you get as fair market value after an accident that totals your car and what you still owe.

It does not cover repairs.

Surely you can find a mechanic that can put in a rebuilt transmission for less than the value of your car? If nothing else, try a junk yard one.

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