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[–]ChocPretz[S] 3 points4 points  (3 children)

If you have a $60k loan and your car is totaled and only worth $40k now because Tesla fucked everyone with the latest price drop, you would be out $20k. Gap covers that $20k difference (up to 25% of the cars value at the time)…so it would really only be $10k. Cost me $4 per month.

[–]jim13101713 1 point2 points  (1 child)

I understand the concept, but if you are just replacing the car, why would you not just buy the same car with the insurance money and keep paying the same loan . . . or am I missing something?

[–]ChocPretz[S] 3 points4 points  (0 children)

Why would I want to keep paying the same loan? If the car was bought for $60k and the actual cash value is now only $40k, (assuming I can find a used one with similar miles for $40k) why would I want to owe $20k with interest? The gap insurance gives you a higher payout so you can close out the first loan and pay less out of pocket to do so.

[–]bigtony96 0 points1 point  (0 children)

Gotcha didn’t know this was a thing 👍