Will gap protection on the auto loan help you if you cannot make the payments and turn it in?

Answer 1

I hope you get this message in time.Dealerships thrive on gap insurance.If you are late on 1 payment your gap insurance will be cancelled and you will not be notified. Gap insurance is mainly used if the vehicle is a total loss in a wreck and your insurance will only cover the blue book value of the vehicle.I would not trust in the gap insurance resolving your loan. My advice to you is to cut all other expenses that are not necessary and keep paying the loan.This is what will happen if you surrender the vehicle.Your vehicle will go to a private auction and be sold for nowhere near the blue book value. These funds will be used to pay the repoman (yes they are still paid if turned in) which will be about 350.00 and another amount will be paid for preparing the vehicle for auction(any repairs made to the vehicle in order to be auctioned).Then the remaining proceeds will be used to pay back the loan and the rest is still be your responsibility and you will have a voluntary surrender on your credit which is bad.You will end up paying ridiculous intrest rates on your next auto loan.These rates can be as much as 29.5 percent and depending on you credit rating the only lender that will accept you for an auto loan will be Drivetime.These people will finance you on a vehicle from their dealership at 29.5 percent and car that will more than likely be undrivable w/in 6 months.I know my answer is longer than what you expected but, you will still be paying for a car you will not have if you turn it in .