State laws and insurance companies guidelines' may vary but there are GAP policies offered for used cars that are financed. GAP insurance is beneficial when the value of a vehicle, new or used, depreciates while you still own money on the loan or lease.

GAP coverage provides for the difference between the actual cash value amount paid if your vehicle is a total loss or stolen and the amount you still owe on the loan or lease. Some insurance providers might have restrictions on their GAP insurance policies but it should be possible to obtain GAP insurance for a used car that still has money owed on it to a lien holder.