Reply
me5
New Visitor
me5
Posts: 1
Registered: ‎12-27-2010
0

Gap Insurance

Is it really necessary... been paying it all along last car but was told cause I am a woman they saw me coming....is it necessary on my next purchase? 

Community Leader
Senior Contributor
StartingOver10
Posts: 4,201
Registered: ‎03-06-2010
0

Re: Gap Insurance

IMO if you want GAP then buy it from a regular insurance company. Don't buy it from the dealership as they will charge you a huge amount. Shop GAP prices before you ever get to a dealer.

 

Don't let them brow beat you into a GAP policy there - right in the contract it states that it is optional yet the finance guy usually tries to add it to you contract price. If you are putting down money so that the amount you finance is less than the value, then don't get GAP insurance.

New Contributor
ds3
Posts: 76
Registered: ‎10-02-2012
0

Re: Gap Insurance

[ Edited ]

Gap on my new car was quoted at $750 from the dealer. I told them no, I can get it for $295 from my CU...he then told me he would give it to me for $250. They can match your bank, just call them on it. They also lowered my Platinum level extended warranty from $3395 to $1295 for the exact same plan. Dealers have all the power if you let them, but once you are in finance and they know you mean to buy the car, they will fold on almost anything if they believe you will walk out.

Valued Contributor
chasmith
Posts: 1,062
Registered: ‎05-26-2010
0

Re: Gap Insurance

[ Edited ]

I'm not sure I agree with Startingover10.  I understand from my auto insurance company (USAA) that they can write Gap insurance in a very small number of states, and not in mine.  Online search for gap insurance finds lots of auto insurers but no pure GAP policies.  I think on my last loan NFCU charged $300 for gap, Ford just charged me $500.  I have an exposure of about $8K if my new car were totaled today, that is protected by GAP insurance.  I'm a believer because I did have an uninsured loss some years ago when a new car (less than a month old) was stolen and burned.  Fortunately I was "only" out $3,300.00.

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
Take the FICO Fitness Challenge
Epic Contributor
Creditaddict
Posts: 20,890
Registered: ‎10-23-2007
0

Re: Gap Insurance

When Buying Used I have ALWAYS Taken GAP except long ago when taking small loan against an older Lexus and that was just because it was only $5k... Now when I refied my Honda from Santander to Navy I should have thought 2 because I paid at Carmax $200-$300 whatever it was and for sure good idea when taking on a loan for 17%!  Anyway fast forward and I wasn't underwater at all so i should have said if Im going down over a year and dropping interest to 3% i don't need GAP and Navy was like $400!! REALLY high I thought and then upon selling it under 6 months later it made it even harder to swallow the thought BUT (sorry need to take my Adderall and come back on topic!)

I don't like the thought of MONTHLY payments towards GAP if I'm understanding what you are saying about your current? How much?

I would not pay $350+ for GAP most likely but I also wouldn't say NO DEALER, they are screwing you, etc. (yes some) but if you are not taking on short term loan and you are not paying not only all taxes, fees, etc. down plus probably a few grand i would take GAP... i mean 2006 we all probably would have been like GAP on my ESCALADE, Please I could drive this off the lot and sell it for $10k more!!! then in 2009? we would have paid someone $10k to burn it on the freeway if you could get your credit card to charge $10k before they closed it! HAHA (Sorry, all false :smileytongue:)

but you just never know when you buy a car... I didn't think i would make money on this Honda that I just spoke of but I mean if you calculate out I WOULD have made money if I had paid cash or had good credit to begin with... the car sold for more then the loan and the loan was working WAY against me and the bringing down balance.

same with my partners car (reliable, low, miles, basic, clean, well cared for cars are the thing in CA if you are not looking at the Bentley that is!

Fico Scores: EQ- 682 DCU, TU 696 Walmart, EX 695 NASA(10-6-14)
You will have to put up Electric Fence to keep me in the garden!
Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
Lowest Limit: Target $200
63 Cards and Counting :smileytongue:
Community Leader
Senior Contributor
StartingOver10
Posts: 4,201
Registered: ‎03-06-2010
0

Re: Gap Insurance

Well, I understand where you are coming from but if you have enough down then there is no gap. I did have an experience once many, many years ago where someone ran into me and my car was totalled. I had to pay the difference to Ford over and above the amount the insurance covered, and it was a large amount (to me). I paid it over the course of 3 months and Ford actually said I could have paid it over a much longer time period. It taught me to finance less on a vehicle.  However, I learned at that point that if I choose to buy a vehicle with a small down payment than that is a risk I am bearing. In my experience the amount that the dealership asks for gap is high. I assume the price varies from region to region and from dealer to dealer. It might be high here because I'm in S Fl - the home of the uninsured driver!

Frequent Contributor
kimmiller112
Posts: 469
Registered: ‎04-09-2012
0

Re: Gap Insurance

If you do not put much down, I highly recommend getting gap insurance.  I purchased a brand new 2012 Jeep Grand Cherokee at the end of May this year.  In August, I was hit by an 88 year old woman pulling out of a shopping plaza who didn't stop at the stop sign.  She had pressed the gas instead of the brake and hit the side of my car, then pulled out behind me so she could pull over behind me when she proceeded to hit the gas instead of the brake again and rearended me, causing a lot of damage to both the side and back of the car.  Two months later, my car is still in the shop and I am driving a rental.  Once the diminished value of the car is determed after it is fixed, it could put me over the amount needed for them to total it, in which case my gap coverage will kick in.  

 

The point is, even if you are a safe driver, others may not be.  If you stand to lose a lot of money if your new car is wrecked several months later, gap insurance helps.  If you don't have it and your loan is worth more than the vehicle is valued at after the wreck when it is appraised, you are responsible for the difference.

Barclays USAir World MC $8300 - DCU $7500 - USAA World MC $7000 - PayPal Extras MC (GE) $5500 - Chase Saphire Preferred $5000 - Discover It $5000 - Barclays Sallie May $2700 - Chase Freedom $1000 - Capital One $8500 (business) - store cards ranging from $500-$9500

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}