How Does Auto Gap Insurance Work? 
Auto gap insurance is designed to reimburse you for the difference in the current value of the car and what you owe on the car , in the event there is a total loss . Since a car rapidly depreciates after you make the purchase , it is very possible -LRB- especially with little or no down-payment or trade-in -RRB- , that you will have this `` gap . '' Typically , the cost is not very expensive , and it can be taken out at the time you purchase the vehicle . You can also purchase a gap policy to cover your deductible , which will reduce your out-of-pocket costs . As an experienced car insurance broker , this coverage is often discussed with our customers . You can often buy coverage from your broker , lending institution or dealership . 