I hear you and logically I feel the same way. However, it depends on the contractual agreement he signed with the dealership. I know that locally, if something happens, like they wreck your vehicle, then your insurance is first up. Now, any dealer can step up and do right by their customer, but unfortunately, people sometimes sign things they don't read. I have no idea about this case, but worse case scenario, he may need that gap after all.

I've never heard of this. If they wreck it, THEIR insurance should be first up. That's the same way it works when you get in an accident. The person's insurance who was at fault gets dinged. Of course, this could be different in "no fault" states or whatever. I only know what happens where I live.

Also, I've very seldom signed anything at a dealer until after the repairs were made. Once again, that's how it works around here.

I suppose everything could be a lot different depending on where an incident takes place.

I do agree that the value of the car is the value of the car though. If he owed more than it's worth, there isn't a lot he can do besides ask for a comparable replacement.

Our problem, as a nation; I believe, is that we actually pay way more than a car is worth when we buy a new one. Which is why I won't buy a brand new one if I can help it. There isn't another single large ticket item that depreciates so greatly in the first small time period of ownership as a new vehicle. IMHO, it depreciates that much because it wasn't worth it in the first place. The price is inflated because the automakers aren't getting the correct value out of their lower skilled positions. If persons job is to tighten lug nuts, that person should get paid based on the value of tightening lug nuts. Once again, I could be wrong and there could be another reason prices are inflated but I don't think I'm wrong about them being inflated in the first place.

I ran into a situation a few years back where I was Tboned in my 1987 blazer. My insurance totaled it and didn't want to give me what it was worth. I told them that was fine if they could find me a replacement that was as in as good of shape as mine. They couldn't/wouldn't so they payed me the money.

Insurance
 

Follows the vehicle not the driver in an "at fault" state.

If you loan you friend you car and he wrecks it (his fault whether single car or multi car accident), your insurance covers the loss. Only time your friend's would come into play is if your policy had lapsed, amount of damage was over your limit, then his would pay excess.

The dealership with have garage liability and grage keepers liability. If vehicle is damage due to normal business it would pay. In the above situation, I woud guess it does not apply since essentially the vehicle was stolen from the dealership.

When it is all said and done, the insurance company paying for the loss will subrogate against the person who took the car to recover their money.

Thanks Payton. I was in the towing business in Ga. for 13 years. I saw this more than once while a car was at a repair shop. One in particular was a dealership where two porters wrecked two cars racing at lunch. Both individuals insurances had to pay for the totals. It may be different in other states, I don't know but that is how it was in Ga.
Not that any of this matters, and no use debating since it looks like the OP and that issue has been resolved.

The entire concept of value is predicated on a desire by two parties to conduct a transaction. Both parties then settle on an amount before the transaction is conducted.

The problem with insurance settlements based on "market" value, particularly when the claimant is not at fault, is that it becomes a forced one sided transaction. ZL1 dude was essentially forced to sell his car by events completely outside his control. Why does his opinions of what its worth suddenly not matter?

Never, ever, in my dealings with insurance companies would I have sold my vehicle for what they offered. I'm pretty sure that if I walked up to the owner of that ZL1, before it was wrecked, and offered to buy his car for the amount the insurance deemed the value of his car was, he would have declined.