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Capital One Refi=No GAP Insurance?

FMC
Frequent Contributor

Capital One Refi=No GAP Insurance?

I just refinanced from 13.4 with First Investors(orig Springboard Auto loan) to Capital One at 9.86%. Not sure if it was a wise move as now I do not have GAP ins anymore. My car insurance company does not offer it, can't get GAP direct in Florida. Loan balance is 21,500 , had 61 payments remaining on orig note now have 63 with Cap One. Payment did drop from 484 to 445. NADA retail value of car is 16,200; 2018 Toyota Corolla LE. Any way I can purchase GAP in Florida now? 

 

 

Message 1 of 13
12 REPLIES 12
Remember0
Valued Contributor

Re: Capital One Refi=No GAP Insurance?

I don't get it... Did you have GAP from the dealership before? Not sure why refinancing a loan would cancel that GAP unless from your old lender. Are you sure that's what the terms say?

You could switch to an auto insurer who does if their rates are reasonable. I know Esurance offers GAP. Maybe see if their rates are competitive for you?
Message 2 of 13
FMC
Frequent Contributor

Re: Capital One Refi=No GAP Insurance?


@Remember0 wrote:
I don't get it... Did you have GAP from the dealership before? Not sure why refinancing a loan would cancel that GAP unless from your old lender. Are you sure that's what the terms say?

You could switch to an auto insurer who does if their rates are reasonable. I know Esurance offers GAP. Maybe see if their rates are competitive for you?

Purchased GAP from Springboard auto(not dealer) who uses CUNA Mutual-called them and they told me GAP policy I puchased no longer valid due to refinance of loan. I will re-read the contract as sometimes customer service does not adequate knowledge. 

 

Essurance rates are not competitive as well as others as I have already looked into that route. Probbaly just going to chance it; if something happens could just roll deficiency into new loan with Cap One. 

Message 3 of 13
SEMO
Frequent Contributor

Re: Capital One Refi=No GAP Insurance?

Typically GAP rider's are only good for the original lender, the loss payee for the GAP policy is the original lender and once the loan is refinanced the GAP rider does not carry over to the new lender, as you have figured out.

 

Maybe switch insurance companies to one who offer's GAP, or start putting extra money in a savings account in the event the vehicle get's totalled and you need to pay the deficient balance. I am not familiar with Florida, but are you saying you are unable to purchase GAP online from a third party because your a florida citizen?

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Message 4 of 13
FMC
Frequent Contributor

Re: Capital One Refi=No GAP Insurance?


@SEMO wrote:

Typically GAP rider's are only good for the original lender, the loss payee for the GAP policy is the original lender and once the loan is refinanced the GAP rider does not carry over to the new lender, as you have figured out.

 

Maybe switch insurance companies to one who offer's GAP, or start putting extra money in a savings account in the event the vehicle get's totalled and you need to pay the deficient balance. I am not familiar with Florida, but are you saying you are unable to purchase GAP online from a third party because your a florida citizen?


Just can't purchase from the company called GAP Direct since they do not sell policies in Florida. Do you know of any other third parties that sell GAP? Other insurance companies that offer GAP rates are not competitive in my area.  

Message 5 of 13
zerofire
Established Contributor

Re: Capital One Refi=No GAP Insurance?

My guess is that Springboard Auto was a specialist in insuring cars and that is why they gave out GAP coverage. Capitol One is a Bank and generally get burned every so often so they know how to deal with it better. As a consequence they do not offer GAP. You just need to go shopping for GAP coverage in the open market. Look at car insurance companies as they are most likely to have it. The only other way to get GAP is to refinance again with a lender that offers it like DCU.

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Message 6 of 13
Hex
Established Contributor

Re: Capital One Refi=No GAP Insurance?

New car replacement insurance might cover any gap. It might be limited to 2 years though.
Message 7 of 13
swanless
New Visitor

Re: Capital One Refi=No GAP Insurance?

Wow, your story sounds like mine. I too just switch from First Investors to Cap One and trying to locate GAP insurance. I've had First Investors for over a year. Paid my car pay,ent way before the due date, paid more to go towards the principle, even made a lump sum payment when I had extra money to cover 4 months of payments. I asked First Investors if I could refi for a better rate and they turned me down. Cap One offered to refi and I jumped on it. Better rate and lower monthly payments. Had Cap One in the past and love them.

 

Message 8 of 13
swanless
New Visitor

Re: Capital One Refi=No GAP Insurance?

Yep, once you refi your loan with another company, the previous company no longer honor your GAP insurance and you should get a pro rated refund back your your previous finance company .

Message 9 of 13
FMC
Frequent Contributor

Re: Capital One Refi=No GAP Insurance?


@swanless wrote:

Yep, once you refi your loan with another company, the previous company no longer honor your GAP insurance and you should get a pro rated refund back your your previous finance company .


I did. Still no GAP , about 4k upside down. If something happens worry about it then. I would purchase from GAP direct if I could. 

Message 10 of 13
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