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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.
@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...
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.
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.