No, this type of situation would not normally be covered under GAP insurance. Gap insurance provides coverage by paying the difference between what your primary insurance carrier would pay for your vehicle if it is determined to be totaled out due to a covered loss.

Gap insurance would then pay the difference between the actual cash value of the car paid out by the primary insurer and the balance of the loan. If your engine has seized or is damaged and needs replacing due to mechanical problems or general wear and tear on it then this would not be covered by your primary insurer or gap insurance.

For the engine to be covered for mechanical breakdown such as this, you would need a warranty that covered the engine or mechanical breakdown insurance. Without these types of coverages you will unfortunately have to pay out of pocket for the repairs to the engine or its replacement.

It is wise to have a mechanic look the vehicle before purchasing a used car it since you do not know the whole history of the car, how it was driven, etc. If you had a mechanic look over the car before you purchased it and they said it was a sound car then you may want to check to see if you have any recourse.

Remember that coverage for specific parts of your vehicle, such as the engine or transmission, to be repaired or replaced is usually done with by means of a warranty. Warranties can be purchased at dealerships, financial institutes or online. Some financial entities also offer mechanical breakdown insurance.