For most Americans the two biggest purchases that you will ever make in your life are your home and your vehicle so the financial decisions that you make when transacting this business has significant ramifications. The thing about purchasing a car is that many auto dealers will try most everything in the book to make extra money off of you, for example, by pushing for extended warranties, or extended loans so as to make the monthly payment lower but the total cost of the vehicle appreciably higher, financial charges and markups added to your loan under miscellaneous fees and charges, along with various nefarious dealer add-ons, including one of the absolute worse, which is gap insurance.
Gap insurance is insurance for your vehicle that covers the "gap" between what your loan amount is for the vehicle and what in actuality the vehicle is physically worth it if was involved in an accident and the car was completely considered totaled by your car insurance company. The first issue with gap insurance is the fact that it doesn't make a lot of sense that the vehicle that you are driving off the dealer's lot is worth less than the amount of money that you now owe on the vehicle. Not only does that not seem fair, it certainly appears to be a rotten deal, after all, if you are on the short end of that stick, why purchase the vehicle in the first place? The next problem with gap insurance is that you can take it for a 100% certainty that if your car dealership is pushing for you to get something for your car and that this certain something must be purchased through that dealership, right here and right now, that they definitely don't have your best interests in mind, that instead they have their extra profitability in mind, and will utilize your fear that this beautiful car needs this extra protection against you.
The fact of the matter is that auto dealerships are not insurance companies, and therefore any gap insurance that you buy from a dealership, in almost every instance, does not originate and is not financed by that dealership. Instead, that dealership has brokered deals with outside insurance agencies that handle gap insurance to which these insurance companies have made a separate deal with the dealership that enables them to handle the transaction, and thereby the auto dealership by virtue of outsourcing the gap insurance to the insurance company is able to at the time of that sale of the vehicle, book that profit or fee, and wash their hands thoroughly of any responsibility in regards to that gap insurance.
This means that should you have a need to avail yourself of this usage of this gap insurance you won't be getting your money back from the dealership that sold the insurance to you, but instead, you will be dealing with a third party insurance company, that may or may not still be in business, that may or may not be legitimate, that may or may not honor their agreement, and almost certainly as part of their business model makes it their business to do every and anything to preclude consumers from collecting on their gap insurance.
Whether gap insurance is something that Is needed or not, a good deal or not, depends on a multitude of factors; but what can be said for a certainty is that you should never get or contemplate getting your gap insurance from a car dealership, but rather instead should contact a legitimate major car insurance company and inquire with them about gap insurance as they are both regulated and have the wherewithal to actual pay a claim out fairly.