Can GAP insurance be used to trade in a car when one is "upside-down"?

Question

My boyfriend traded in his car and was told by the people at the dealership he should contact the place he bought the car from and get a check for his gap insurance (in the amount of the negative equity). This didn't sound right to me, but some things say you can and others say you can't. Has anybody actually done this?

Answer 1

No. Gap insurance is used to cover the difference between the outstanding loan amount and the insurance settlement when a vehicle is stolen or declared a total loss due to collision. It has nothing to do with trading in a car. Good try, though.

Answer 2

No, gap insurance cannot be used for negative equity. It is used to make up the difference in the event the vehicle is totaled in an accident or stolen. He can, however, request a refund for the unused portion of the gap premiums he paid.  

Answer 3

no, gap ins is for the difference between the value and the amount financed, if accident or theft occurs

Answer 4

Gap insurance will insure one for the difference between what one would owe on a vehicle and what an insurance company says it's worth in the event the vehicle is totaled in an accident. Its not there to protect your trade in value.