{"id":163,"date":"2026-03-09T09:14:00","date_gmt":"2026-03-09T09:14:00","guid":{"rendered":"https:\/\/tt-blogs.dealerfire.com\/folsomautomall\/?p=163"},"modified":"2026-03-25T09:15:11","modified_gmt":"2026-03-25T09:15:11","slug":"what-are-debt-cancellation-agreements","status":"publish","type":"post","link":"https:\/\/www.folsomautomall.com\/blog\/what-are-debt-cancellation-agreements\/","title":{"rendered":"What are Debt Cancellation Agreements?"},"content":{"rendered":"\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Folsom Auto Mall - What Debt Cancellation Agreements Are And Why You Might Need Them\" width=\"474\" height=\"267\" src=\"https:\/\/www.youtube.com\/embed\/DnY1pH-To1U?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<p><em><strong>Have you ever wondered what Debt Cancellation Agreements are? Wondered why you might need one? Folsom Auto Mall is pleased to explain.<\/strong><\/em><\/p>\n\n\n\n<!--more-->\n\n\n\n<p>In short, debt cancellation agreements (sometimes referred to as \u201cGap\u201d) are contracts that cover the difference &#8211; or the gap &#8211; between what your new vehicle is actually worth and the amount you still owe on it. Basically, your new car could depreciate faster than you pay down your loan, so you might end up owing more than it\u2019s actually worth &#8211; especially in the first few years of ownership.<br><br>In the event of an accident, you might think that car insurance is enough. The thing is &#8211; your car insurance covers the actual value of your vehicle, not your loan amount. So if your vehicle is badly damaged or even totaled, your insurance might not cover the entire cost to fix or replace it and you could still owe &#8211; on a car you can\u2019t drive. Remember, the moment you drive your vehicle off the lot, it depreciates in value &#8211; so your insurance coverage wouldn\u2019t pay the sticker price &#8211; it would pay the depreciated value. \u00a0<br><br>That\u2019s where these debt cancellation agreements come in &#8211; they pay for the -gap- in coverage. This inexpensive add-on policy would cover the difference so you don\u2019t owe any additional money for repair or replacement and it would allow you to pay off your loan, no sweat!<br><br>Typically, these \u201cgap\u201d policies can cost anywhere from $400-$700 but could ultimately save you thousands. Every year, there are approximately 6 million car accidents in the US, that\u2019s 16,438 car crashes per day. Car insurance companies estimate that the average driver will file an insurance claim for an accident once every 17.9 years. This means that a typical driver will likely have a crash by the time they\u2019re 34. That averages out to 3-4 vehicle accidents over the course of their lifetime &#8211; so debt cancellation agreements are a pretty good bet.<br><br>Find out more about debt cancellation agreements at one of our convenient <a href=\"https:\/\/www.folsomautomall.com\/locations\/index.htm\">Folsom Auto Mall dealership locations.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Have you ever wondered what Debt Cancellation Agreements are? Wondered why you might need one? Folsom Auto Mall is pleased to explain.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[11,10,2],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v16.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<link rel=\"canonical\" href=\"https:\/\/tt-blogs.dealerfire.com\/folsomautomall\/what-are-debt-cancellation-agreements\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What are Debt Cancellation Agreements? - Folsom Auto Mall\" \/>\n<meta property=\"og:description\" content=\"Have you ever wondered what Debt Cancellation Agreements are? Wondered why you might need one? 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