What does gap mean?

Question

i need to know what is gap

Answer 1

you buy a car for $15,000,

then you drive it off the lot, its worth $12,000,

someone smashes in to it at the first stop light and totals it.

The INS pays you $12,000 as that's what a used car is worth, even with 5 miles on it.

oK that's extreme.

But figure it after a year and you've only paid about $1,000 on the principle of the loan but the year old car is worth $3,000 less than what you owe.

To pay off the car, you need gap ins.

so basically you paid a down payment and car payments fro a year and get to walk away with no debt, or a car.

Answer 2

I am assuming in my response that you mean gap insurance.

It is a coverage that pays the maximum of the amount you owe on a loan/lease and the actual value of your vehicle if it is totalled.

Answer 3

the minute you purchase a car and they hand you the keys the car depreciates. Gap insurance covers any amount on a car that is totaled in full. If you do not have this coverage then you could still owe after your insurance company pays all it is going to pay.

Answer 4

It is something that is not covered.  You can fall into a gap in the road.  What kind of gap are you referring to?  If it is a gap in insurance coverage, it is the length of time you are not covered.  If it is the gap between groups, you can not exceed 63 days without coverage or the new group can apply a pre-existing condition clause.  Need more information to answer properly.

Answer 5

We need more information to answer this properly.

A "gap in coverage" usually means a period of time when you are not insured. If you do not make your payment on time, and the policy is cancelled for nonpayment, but subsequently you pay to reinstate the policy, you might have a gap period where you had no coverage.

"Gap insurance" usually means coverage for the gap between the value of a car and the outstanding loan. Suppose you buy a car for $20,000, and it depreciates to $15,000, but your loan balance is $17,000. If you have a serious accident and the car is totaled (can't be repaired), the company will pay you the value of the car ($15,000). The bank will still want payment for $17,000. You have a gap of $2,000 that you must pay to the bank. You can get "gap insurance" to pay off the remainder of that loan balance for you if the car is totaled.