Expert: Richard Hixenbaugh - 8/18/2010

Question
Hi Richard, we purchased gap insurance from the car dealer when we
bought our car, the was recently totaled and now gap is saying that they
ate not covering all of the negative equity ( which the dealer had told us
they would cover it all when we bought the coverage) and they are
deducting $1000 from the pay out to cover wear and tear... Isn't this the
point of gap? We asked for a breakdown to see how they came to the pay
out amount( half of what is still owed) and we were told "no, it's an internal
document" what do I do from here? Who do we go after? Thank you!

Answer
Hi Cerissa,

To the best of my knowledge, GAP insurance does not pay for any negative equity rolled into a new car loan. It does pay the difference between the insurance settlement and the remaining balance on the newly purchased vehicle.

The GAP insurance company is required to provide you with a detailed accointing of how they arrived at their settlement amount if you ask. If they will not do so then you should file a complaint with your state insurance commissioners office.

Unfortunately, car salesman are not always the most truthful people. It does not mater what a salsman tells you. The only thing that is enforceable is the contract wording. You would need to read the contract to truley know what it covered and what is not.

I hope this helps
Richard Hixenbaugh