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GAP insurance

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CowboyRay
New Member

Re: GAP insurance

Penfed sells GAP insurance pretty cheap, about $300  well worth ot if you buy an expensive car and finance for the long haul, worthless on a Toyota with a low interest, shorter  loan mainly because Toyotas barely depreciate. 

 

My dad recently bought a Toyota and the dealer offered gap for $800, I laughed because the dealer price was so inflated. 

 

 

Message 11 of 15
Anonymous
Not applicable

Re: GAP insurance

Great information! Did not know the different ways Gap Insurance could help survive a car loan pay off. Very interesting!
Message 12 of 15
Loquat
Moderator Emeritus

Re: GAP insurance


@CowboyRay wrote:

Penfed sells GAP insurance pretty cheap, about $300  well worth ot if you buy an expensive car and finance for the long haul, worthless on a Toyota with a low interest, shorter  loan mainly because Toyotas barely depreciate. 

 

My dad recently bought a Toyota and the dealer offered gap for $800, I laughed because the dealer price was so inflated. 

 

 


Cars are a depreciating asset.  Toyota, Lexus, Land Rover, BMW, doesn't really matter.  Yes, some depreciate faster than others, but nonetheless they all do.  The need for GAP shouldn't be based on the legnth of the loan or interate rate, but more so about how much you finance verses the vehicles worth as well as how you plan to utilize the vehicle.  If you drive a lot, tend to put more wear and tear on the vehicles condition from said driving, and financed a significant amount of the purchase price, then it's definitely something to consider. 

 

I've never purchased a vehicle without GAP because I to tend to drive a lot (about 25k miles a year) and my vehicle takes on a lot abuse from highway driving (i.e. rock chips, etc). so unless I'm financing less than 50% of my vehicles value then the small cost of GAP is well worth it in my situations.   Don't discount GAP as I've seen it save a few folks from making a car payment on a vehicle that's been totaled and they've owed a lot more than what the insurance company payout was.  Making a car payment on a totaled vehicle while also making a payment on a replacement vehicle can't be a fun situation I would imagine.

 

Food for thought...

 

Message 13 of 15
MakingProgress
Senior Contributor

Re: GAP insurance

My auto loan trough State Farm Bank no only had a lower interest rate than what the dealer offered but they include GAP in the loan at no additional cost.   I know the cost of it is buried in the loan but it is no additional payment.   So I have a lower APR, payment, and GAP included than I was offered from the dealer (who wanted to finance through (Capital One Auto)  without GAP. 

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Message 14 of 15
IncrsCreditScore1
Valued Contributor

Re: GAP insurance

Great information.  I am going to check with at least one relative who I know is paying for GAP.  Will be interesting to see if she purchased from dealer or from her credit union.

January 2018 Scores - EQ 797 | TU 800 | EX 798 | ~~Started Gardening Again on March 21, 2017
Message 15 of 15
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