Go Back To Search Results Question What happens with car loans after damage? My friend's car was crushed by a tree on Sunday in a snowstorm. His insurance is giving him 9000 for the car, but he still owed like 19000 on it. The bank is refusing to transfer the amount to a new car. How can they force him to pay for something that a. wasn't his fault and b. isn't driveable? If his house was knocked down by a tornado, he wouldn't have to continue to pay the mortgage--how is a car different? He did have GAP insurance... that's why I'm confused, and so is he. By Sit'nTeach'nNanny Posted on 04/02/09 Total Answers 3 Answers- When your friend purchased the car he was given the opportunity to purchase "GAP" insurance..I hope he did so..because unlike a house that gains value..a car losses value..so if they put no moey down and refianced an existing loan into the new car.. now they owe more than the car is worth..of course all the regular insurance is going to pay is the current value of the car...they will need to pay the difference..not a good Idea to not have "GAP" insurance...check with the dealer who financed the car to see if maybe he got lucky and actually did purchase it.. Answer by : Rick M On Date 2009-04-02 08:29:06 Your friend will be responsible for the remaining balance unfortunately and that is the reason people should buy GAP insurance because you just don't know what will happen........ Your house and a car are two different things, a house gains value and a car does not... Answer by : UCANTCME On Date 2009-04-02 08:30:44 The balance still must be paid, regardless of fault. The real fault lies with your friend signing up for a bad loan. He needs to contact the gap insurance company, his primary insurer is still only going to pay the actual cash value of the car. Gap is totally separate. Answer by : Ozgood On Date 2009-04-02 08:33:56   Go Back To Search Results