Gap insurace

[Anonymous]

Hi so i just found out after having my car for two years that I am not covered under any gap insurance and i am wanting to know of any places that sell it and for a decnt price if possible!

Please help!!!

[Anonymous]

I just went through this on a new auto purchase. I've never gotten it before as I felt I put enough down that I didn't have to. My thought on putting it on this new car is that since we're upside down from the start, I better. 

The dealer offered it to us at purchase for $995. (ah, no)

DCU offers it with the loan for $295 (much better)

We opted to get it through our auto insurance. I didn't do a lot of checking since I needed to get the loan finalized and it was the holiday weekend and just thereafter. My thought with going for it through my insurance was that we wouldn't need it for the life of the loan, just until such time as we're not upside down. Right? 

Allstate, via our insurance, is $36 for 6 mo. I figure that's $6 a month and compared to DCU, we could keep the gap with Allstate (assuming no raise in rates) for 4 years or less and come out ahead doing it this way. If we're upside down for more than 48 months on a 65 month loan, something's wrong. 

After two years, how is the value of your car vs. what you owe? 

[Anonymous]

I highly recommend Gap insurance. As soon as a car is purchased and leaves the lot there is a depreciation. If you're in an accident and they tell you that the $40k car you just bought and totalled will have a payout of $35k, guess who eats the $5k - yup, the consumer. Don't let that happen, you never know when an accident will happen. Gap insurance saved me a few years ago when I was in an at-fault accident and my Jeep kbb value was less than what I owed. I was so glad I had that clause, it was worth the extra $.

[Anonymous]

You should be able to get it through your insurance as someone else mentioned earlier. I purchased mine through the bank when I initially purchased my car. I personally feel that gap should be kept on your vehicle until it is paid off simply because of how cars tend to lose value magically. One day it will be worth one amount but once an unexpected accideent happens things change. Better to have it and not need it instead of the other way around.

[TRC_WA]

I have Loan/Lease Payoff thru Progressive.

$17 a month and it covers 25% of the actual cash value of the vehicle after the insurance payout.

More than enough to cover any negative equity and much cheaper than dealer GAP.  I owe $38k on my Challenger and the car with all the options I have and have since added after purchase have the wholesale value right around $37k.

Not sure how that relates to what Progressive were to give me if the car was totalled but at $17 a month I'll sleep better regardless.

[Anonymous]

NM 

[Anonymous]

I would first find out if you have a GAP to insure.  Most folks (unless they have a high APR, really long loan and a quickly depreciating car) are pretty much even at the two year point.  We had a car stolen and I was surprised to learn that when they pay off the car they include sales tax, licensing etc as well as the fair market value of the car so we did not do as badly as we thought although it was not a pleasent experience.  I have seen people put big down payments on cars where they had equity and then were sold GAP policies for cars with no GAP so I would just find out how much GAP you have before you buy something you may not need to insure a very small GAP

[joedtx]

Highly recommend GAP i'm amazed at what some dealers charge for it $1,200  but for you today only $900,  NFCU still offers it for $199

[Anonymous]

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@joedtx wrote:

Highly recommend GAP i'm amazed at what some dealers charge for it $1,200  but for you today only $900,  NFCU still offers it for $199

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I have been following the industry by subscribing to some of the trade journals, dealers make an average of $1900 on each car in that finance office and their markup on GAP is a big reason. Of course they also mark up interest, sell crap you don't need and sell folks a warranty on cars with warranties so at least GAP has some real value but not for what they charge.

[StartingOver10]

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@Anonymous wrote:

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@joedtx wrote:

Highly recommend GAP i'm amazed at what some dealers charge for it $1,200  but for you today only $900,  NFCU still offers it for $199

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I have been following the industry by subscribing to some of the trade journals, dealers make an average of $1900 on each car in that finance office and their markup on GAP is a big reason. Of course they also mark up interest, sell crap you don't need and sell folks a warranty on cars with warranties so at least GAP has some real value but not for what they charge.

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$900 to $1200 for GAP, that is insane.

Agree 100% with workingfor850, the finance person is not your friend. S/he is there to boost profits for the dealership as well as get you financing at a premium par rate (not a good thing). I understand that dealers need to make a profit, but it is the job of the consumer to reduce the expense as much as realistically possible in a purchase so the consumer and the finance person have opposite goals in that respect.

There is nothing wrong with getting a GAP policy - just get it from a different source as others above pointed out. GAP is insurance. I can tell you if the finance guy quoted $900 to $1200 gap to me, he would lose the whole deal as I would (and have) get up and walk out. To me, quoting a ridiculously high price implies he thinks I'm stupid enough to buy his BS. The F&I guy has complete authority over what he will quote for any of the given add-on items. So the higher the price, the less respect s/he has for you IMO.