If a person is sanctioned a loan that is lesser than what could be real worth of the car, what should be done?


In several cases, the value of the car could be lesser than the balance on the car loan. This could occur due to various reasons. The changes in the interest rate might have increased the balance loan amount. If the car had been poorly maintained, the value of the car would diminish. The rebates available for the car might not have been applied fully or partially to the purchase value. Since the insurers base the loan payments on the ACV or actual cash value of the car, the amount of the loan would be different. However, certain states have a special provision known as guaranteed auto protection or GAP. If the GAP were purchased when the car is bought, it would cover the difference between the loan balance and the actual cash value.