Lets just say you Paid $20,000 for a car, and totalled it the next day. To your insurance company, your car is worth about $16,000. The GAP will cover that difference of $4,000.The Lender does not care that you wrecked the car, to them you would still owe $4,000 and also have no vehicle. Also, GAP is a VERY good idea if you rolled any negative equity into your loan from a trade in. Cars cost $20,000, you rolled $2,000, insurance pays $16,000.on't buy Gap insurance if your car insurers cover like for like in the first year. You can defer the Gap until after the first year. I made that mistake and now I have exchanged my Toyota for a newer model I will only benefit 1 year gap instead of 3.