It just pays the difference between actual cash value (what your insurance pays) and the balance owed on the financing.

Say you have a car worth $20,000 but owe $25,000 on it. You crash the car. Insurance pays the $20,000 value to your bank to pay off the loan. You are still responsible for paying the bank the other $5,000 to pay the rest of the loan off. GAP insurance will pay off that $5,000 for you so you don't have to.

In the US, GAP insurance can be bought from the dealer you buy the car from, the bank you finance through, or your car insurance company.

 

Thanks for clearing that up Andre.

 

Yep- his explanation was perfect.

GAP was unimportant in my case, since my car wasn't totalled.

But before I got out of my car to see what the damages were, I was terrified I'd get out, and find the car had been totalled and that sucked, because I hadn't purchased gap insurance yet (Got it from lender the next day, but they werent open when I left the dealer)

Fortunately, unimportant for my case because the car is not totalled... Estimate is sitting at 5700$ though.



And for the person who mentioned me filing a diminished value claim-- or for anybody who knows anything about these types of claims, please chime in.

When on the phone with my insurance company, they mentioned that I should look into a diminished value claim. (I filed everything through the other partys insurance, as he is at fault, but I’ve kept my insurance company informed throughout the process). He told me about how the process works with their company- After the repairs are complete, I file the claim, generally they give me an offer, and if I don’t find it fair I can get a third party to do a appraisal of the vehicle.

If anybody has ANY information about the DV claim process (I’m in florida, and the at-fault party is using state-farm if that helps) please post with any relevant information. Thank you.

 

When I asked for diminished value from Progressive (their insurance co.) when my neighbor backed into my old Fit, Progressive said no because I was having my car fixed at a Honda certified body shop (one of our local Honda dealerships has their own body shop on-site).

They said being that a certified Honda bodyshop is doing the work, the car will be fully restored and will not have a diminished value.

I didn't fight them. All they did was sand and repaint my rear bumper and rear quarter panel.

But for something major like yours, I would definitely push them as hard as possible, especially considering its a BRAND NEW car. You should get something IMO.

 

I am sorry you had this accident but it seems like things will be OK. I almost was backed into, the guy did not hear the FIT horn. After that, I installed the FIT sport horn from College Hills Honda. It is a direct bolt on replacement and is LOUDER! Just a thought for everyone reading this that may prevent an accident for you. I found the plastic clips hard to get off with damaging them, the College Hills video install made it look easy to remove them. They must have a special tool for that..

 

I can so (unfortunately) totally relate to your story! I only had my '15 Fit for 5 weeks and 800 miles. I had just detailed it from head to toe that Sunday. I'm driving to work on Monday morning, and something literally fell out of the sky (from a highway over-pass) and landed smack on the hood of the car. They had to replace the hood. I think I'm over it, I think, but it still SUCKS!

 

I have never heard of it either so I looked this up. I do not see how it applies in this case.

http://en.wikipedia.org/wiki/GAP_Insurance

 

UPDATE!!!! ---

After over a month of being in the shop, I FINALLY get my car back today. I got the call earlier My car isn't even ready- there is a small part for the rear door molding that is on back order. I had the option of waiting another week or two until it comes in, or I was welcome to come by and pick up today, and bring the car back when the part comes in (That part will apparently take under ten minutes to install.) I miss my car, and considering that I've already made car payments but havent yet driven my car, i am OVER THE MOON ECSTATIC to get it back..

Total damages seem to be 6 and a half thousand dollars. Wow. Once I get it back I'll get to start my diminished value claim with the insurance company. Hope that goes well.

Thanks for all the support from everybody here. I have so many accessories sitting at home waiting to go in the car-- Car air fresheners (I wish I could have experienced the new car smell....), all season floor mats, everything I'll ever need to detail my car, a car vacuume, a really great pair of jumper cables, all sorts of stuff. A honda fit keychain dangle.

Gosh I'm just really excited to get my car back.

 

Congrats on getting your car back. Can't believe that cost $6500, 1/3 of its value. Those repair costs add up so quickly.

 

I hit a Very Large Raccoon with my '00 New Beetle TDI when it was about 3 years old. The repair tab came to $6,500, and the shop did a nice job - couldn't tell it had been hit at all. I drove it to almost 220K miles and got a good price when I sold it (still running great).

Bummer this happened in your first hours of ownership, but now it's repaired, go enjoy it! (c:

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