topic Gap Insurance Question 150 LTV in Auto Loans

Gap Insurance Question 150 LTV

TattnallTrio — Sat, 06 Mar 2021 08:18:39 GMT

Hi Everybody,
My best friend traded his car in for a brand new 2020 Dodge Grand Caravan with huge rebates... however, he traded a car with $9k negative equity into the new loan. The GAP insurance that the dealer sold only covers 120% of Actual Cash Value.... I don't think this is sufficent. Does anyone have any ideas? I want them to be protected if something happens. Progressive offers Gap but the limit is whatever the car is worth, plus 25%... which is better.... although I wonder if there are GAP policies that cover the entire thing, if something goes wrong. Refinancing the vehicle isn't an option for them right now.

Re: Gap Insurance Question 150 LTV

mich800 — Sat, 06 Mar 2021 14:52:57 GMT

I doubt you will find insurance with unlimited coverage. Those limits are put in place for the exact reason of limiting policy holders rolling huge negative equity into a loan without risk. It is to protect from depreciation not a bad financial arrangement.

Re: Gap Insurance Question 150 LTV

4sallypat — Sat, 06 Mar 2021 15:22:58 GMT

How about getting an additional umbrella insurance policy to cover the car ?

Re: Gap Insurance Question 150 LTV

Loquat — Wed, 10 Mar 2021 02:44:14 GMT

The best thing your friend can do is aggressively pay down the vehicle to the point of equity. Hoping to find a lender GAP provider that's going to cover whatever bloated amount of a loan will be as hard as finding a teardrop in the ocean.

I can't think of any company that would willingly take such a risk. Not saying that there isn't one...I'm just not aware of such as I was a Finance Manager for a large automotive network for many years.