GAP insurance covers your liability if the car is totaled. Say the car is worth $25k, but the payoff is $35k. Despite the car being $10k upside down, you get to walk away.
Now, let’s say you go $5k out of pocked on a downpayment and the car is totaled. Now the car is worth $25k, but the payoff is $30k. You still get to walk away, but your $5k downpayment is gone forever.