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GAP Insurance

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Frequent Contributor

GAP Insurance

Today I bought GAP insurance online from GAP Direct. When I financed the vehicle purchase through the dealership last week, I declined GAP insurance at that time. My auto insurance company (State Farm) only offers GAP insurance if you finance the vehicle through them.

 

By purchasing GAP insurance afterwards, I probably saved hundreds of dollars. The online transaction was easy: I paid $185 for 24 months coverage, which seems pretty reasonable. The coverage is relatively straightforward and the policy is clear and concise.

 

Using an amortization table, I calculated that on or before 24 months into my loan, I'll no longer be upside down on the car and therefore won't need GAP insurance. GAP Direct offers 48 months insurance for a higher premium.

 

9 REPLIES 9
Valued Contributor

Re: GAP Insurance

Thank you for sharing this information.

Starting Scores FICO 8 (Feb '18):
EX- 519, TU- 530, EQ- 545

Current Scores



Message 2 of 10
Valued Contributor

Re: GAP Insurance

Congratulations!

Starting Scores FICO 8 (Feb '18):
EX- 519, TU- 530, EQ- 545

Current Scores



Message 3 of 10
Senior Contributor

Re: GAP Insurance

IMO if you choose to purchase GAP insurance (I never have or would), the ONLY way to do it is outside the dealer finance office. Most insurance companies offer GAP for their policyholders and as you mentioned there are other companies that are much MUCH cheaper that you can buy the policy from for the same or better coverage - smart move Smiley Happy 

Message 4 of 10
Community Leader
Super Contributor

Re: GAP Insurance


@pipeguy wrote:

IMO if you choose to purchase GAP insurance (I never have or would), the ONLY way to do it is outside the dealer finance office. Most insurance companies offer GAP for their policyholders and as you mentioned there are other companies that are much MUCH cheaper that you can buy the policy from for the same or better coverage - smart move Smiley Happy 


Right! and dont let the dealership bully you into thinking its "required"  to get it there at their dealership in order to get the car. When I bought my car 6 years ago, the guy told me he couldnt finance it without it, or Id have to walk. I said...I'll walk! LOL.. Then I said, "I dont need Gap...Im putting down half of the car", so, either finance me the rest, or I'll walk.....right next door to Nissan! (Im brutal when it comes to negotiations).  I got my car and without Gap, and I "think" I heard one of the guys say the B word as I was leaving.  I smiled to myself, and quietly said.. my job here is done, LOLSmiley Wink

 

On a side note... Last week,  I took my car in for an oil change to the dealership (same one where I bought it), and I was on the dealer floor just walking around killing time, and stopped in front of a window to look outside at the new cars, and I overheard one of the sales guys say... "oh, I got this fellas, just watch and learn"...(rolls eyes).. comes up to me, and says.."hey there, how  about I get you into a new car today"!! , me, without even blinking an eye, still staring out the window, say.."How about Im not interested", then I took a sip of my DP, and turned around and walked back to the sitting area...LOL...Heard a few of the guys laughing.  Honestly, I didnt feel like I was very approachable that day, but he felt confident  hahahaha. 


Scores held down by umpteen INQ & New accounts, and a paid off loan and new loan reporting.
~~~BK7 d/c-08/2013......my rebuild worked for me, but won't necessarily work for you.~~~
Message 5 of 10
Frequent Contributor

Re: GAP Insurance

DCU offers GAP if you finance with them for a one time fee of $295.

For this $295 it covers the life of loan up to 7 years.

In addition to standard GAP features it will reimburse your insurance deductible for up to $1,000 if there is a total loss.

It will also give you $1,000 if you refinance with them.

Message 6 of 10
Frequent Contributor

Re: GAP Insurance

Thanks for the find, I did notice in their FAQ that they only cover up to 115% of KBB retail, which for most would be sufficient but some people with a ton of inequity may not have enough coverage with their policy. GAP sold at dealer's will typically cover 125-150% of NADA retail depending on the GAP company. At a cost of roughly $92.50 per year of coverage, if one wanted GAP coverage for the full term of the loan, a dealer GAP may be cheaper if your able to negotiate a lower cost.

AMEX BCE ($39,500) CITI AAdvantage ($20,500) Region's Platinum Card ($14,400) Discover IT ($23,000) Macy's ($7,000) Chase FU ($10,000) Barclay's Aviator ($22,000) TU:778 EX: 781 EQ:791
Message 7 of 10
Frequent Contributor

Re: GAP Insurance

Incidentally, the GAP Direct policy excludes the following vehicles:

 

"The following types of vehicles and makes/models are not eligible for coverage and are excluded from this GAP policy: (a) commercial vehicles and vehicles not licensed for street use; (b) vans and pickup trucks with greater than 1- ton cargo capacity; (c) vehicles for rent or hire; (d) recreational vehicles and trailers; (e) emergency vehicles: (f) vehicles used for racing, speed contest or exhibition of any kind; (g) grey market vehicles; (h) kit cars and dune buggies; (i) Aston Martin, Bentley, Bugatti, Ferrari, Lamborghini, Lotus, Maserati, Maybach, Rolls Royce, Porsche, Tesla, and Corvette."

 

So if you're buying a Tesla or Ferrari, you should probably fold GAP insurance (if needed) into your loan or primary auto insurance...!

 

Message 8 of 10
Senior Contributor

Re: GAP Insurance


@ridgebackpilot wrote:

Incidentally, the GAP Direct policy excludes the following vehicles:

 

"The following types of vehicles and makes/models are not eligible for coverage and are excluded from this GAP policy: (a) commercial vehicles and vehicles not licensed for street use; (b) vans and pickup trucks with greater than 1- ton cargo capacity; (c) vehicles for rent or hire; (d) recreational vehicles and trailers; (e) emergency vehicles: (f) vehicles used for racing, speed contest or exhibition of any kind; (g) grey market vehicles; (h) kit cars and dune buggies; (i) Aston Martin, Bentley, Bugatti, Ferrari, Lamborghini, Lotus, Maserati, Maybach, Rolls Royce, Porsche, Tesla, and Corvette."

 

So if you're buying a Tesla or Ferrari, you should probably fold GAP insurance (if needed) into your loan or primary auto insurance...!

 


^%#&%$#.... I was just on my way to sign on the dotted line too - forget it I'm going for a leaf now Smiley Wink

Message 9 of 10
Frequent Contributor

Re: GAP Insurance

Thank you for that information!

 

I was just approved for financing through Subaru (1.9%) and knew I wouldn't do GAP through them, but was unsure where to go because most CU's require financing through them in order to purchase their lower priced GAP.

Present Day...Equifax: 717, TransUnion: 709, Experian: 770
Sept. 2016...Equifax: 652, TransUnion: 608, Experian: 597
PenFed CLOC: $500
Message 10 of 10