An overlay is the paving of a second layer of asphalt over existing asphalt. An overlay can be done when the existing asphalt is in overall good condition but may have some problem areas. Depending on the degree of cracking, crumbling or sunken areas, those areas can be cut out, patched and then a new layer can be paved. The new layer of asphalt will follow the old asphalt cracks (reflective cracking) and waves in a very short period of time.