GAP ?

[Anonymous]

You have pretty solid amount of equity so i don't think GAP is needed BUT i will say this, if your use of the vehicle is different than average that results in either significantly higher that average yearly use or significant body damage (like a work truck on a farm) then you can still find your self in a bad spot on the loan if you are involved in a total loss as the depreciation from miles and or conditions can take a big chunk out of the value. Just food for thought, only you know how the truck will be used and maintained.

[Anonymous]

---

@Anonymous wrote:
You have pretty solid amount of equity so i don't think GAP is needed BUT i will say this, if your use of the vehicle is different than average that results in either significantly higher that average yearly use or significant body damage (like a work truck on a farm) then you can still find your self in a bad spot on the loan if you are involved in a total loss as the depreciation from miles and or conditions can take a big chunk out of the value. Just food for thought, only you know how the truck will be used and maintained.

---

This is a good point to consider. If you consider depreciation you could end up with less money in a total loss, but your loan principal is low compared to the current value so you should be good.

[Anonymous]

What he should consider is new car replacement being added to his auto insurance policy.  For 5-6 bucks a month I have it with USAA and it adds 20% to the payout for any total loss.  This really helps protect you in the event of a loss, especially on a new vehicle because they depreciate so much in the first three years of ownership.  I have it on all of my cars and none of them have any negative equity.

[Anonymous]

---

@IPIF wrote:

on a new (not pre-owned) car you should have GAP insurance if you pay only a small down payment. The car will depreciate as soon as you drive it off the lot and continue with significant depreciation during the first year. So even if you are not upside down when you buy the car, you can be upside down when you drive it off the lot. But I would not buy it from car dealer or credit union. Many car insurers will sell it to you for a small additional premium. They may call it New Car Replacement insurance. 

---

That's odd, I just purchased new vehicle and the salesman dont bother offering me GAP insurance when my fiananced/loan amount is well below vehicle's retail price. Putting larger down payment helps and if you have another vehicle as trade in would bring down the retail price of the new purchase.