Is Gap insurance worth it to purchase?

[Triforceofcourage]

Usually is around $700 and was wondering if it's just another
Profit center for the stealership. Is it worth it?

Old thread revived by spammer.
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[Horsepower]

It is a profit center for the dealership. Speak with your regular car insurance company for a better deal.

 

[KentState]

I think mine is like $30/year. Get it, but through your agent.

 

[JulesMaximus]

Is your car likely to be stolen or wrecked? Personally, mine isn't so I've never bothered with GAP insurance on any vehicle I've owned...even motorcycles I've financed.

 

[RKS]

I would advise it if you buy a used car from a not-so-reputable lot. The purchase price is usually greatly inflated over the actual value. If you get into a wreck and the car is totaled, you are making payments on a car you no longer have.

 

[exar333]

If you buy a new car (with a loan) that depreciates decently GAP is definitely worth-it. Shop around and get a good deal.

Many people roll their existing loans into a new-car loan, or add extended service plans and/or taxes into their car loan that often times will cause them to be upside-down on the loan for the first couple years. GAP protects you from paying off the remainder of car that is no longer driveable. Definitely worth it in my eyes, if you are buying a car with a loan.

 

[JeffreyLebowski]

If you buy a new car (with a loan) that depreciates decently GAP is definitely worth-it. Shop around and get a good deal.

Many people roll their existing loans into a new-car loan, or add extended service plans and/or taxes into their car loan that often times will cause them to be upside-down on the loan for the first couple years. GAP protects you from paying off the remainder of car that is no longer driveable. Definitely worth it in my eyes, if you are buying a car with a loan.

This,
If you are financing it, get GAP. It is a profit center for the dealership, but it will save your ass when you need it.
Think of it this way. They say when you drive a new car off the lot it looses 1/4 to 1/3rd the value. Unless you put down that much cash + more to cover taxes and any negative you may have rolled into it, is the $500-$700 for GAP insurance more or less than how much upside down you are on your new car? If it is less, then you need GAP coverage.

 

[fbrdphreak]

If you buy a new car (with a loan) that depreciates decently GAP is definitely worth-it. Shop around and get a good deal.

Many people roll their existing loans into a new-car loan, or add extended service plans and/or taxes into their car loan that often times will cause them to be upside-down on the loan for the first couple years. GAP protects you from paying off the remainder of car that is no longer driveable. Definitely worth it in my eyes, if you are buying a car with a loan.

Bingo. But don't get it from the dealer.

 

[KentState]

Is your car likely to be stolen or wrecked? Personally, mine isn't....

You are just one huge ball of awesomeness I assume.

 

[IcePickFreak]

GAP is only needed when your vehicle is worth less than you owe on it. Generally that means a brand-new vehicle that depreciates the second you drive it off the lot. There's obviously exceptions to that if you, for instance, put a big down payment on the car. Otherwise if you total a car that you owe $25,000 on but it's only valued at $20,000, insurance will only pay you the $20,000 and you still have a $5,000 loan to pay off and still no car.

GAP will cover that difference, but be sure to read the fine print as it will have a max. payout as well - like 25% of the actual value, so in the example above it would cover that extra $5,000. Once you pay the car down a bit you can usually give up the GAP insurance since you'll owe less than what it's valued at. Definitely get it through your insurance carrier rather than the stealership. I payed something like $12/month for GAP through my insurance company.

 

[JulesMaximus]

You are just one huge ball of awesomeness I assume.

I've been driving for decades and many hundreds of thousands of miles and financed many vehicles during that time. I've yet to total one of them.

Seems like a big waste of money if you ask me.

I am a huge ball of awesomeness though. 😛

 

[daw123]

I bought return-to-invoice GAP insurance on a used Impreza WRX I bought from a main dealer. I got the GAP insurance from an insurance broker (not affiliated with the dealership) for about £300 (~$500) for a three year period with a maximum payout of £5,000 ($8,000).

For me it was worth the piece of mind especially since I would get a significant portion of the invoice value of the car if it were to be stolen and not recovered, written off, etc. even nearing the end of the 3 year GAP cover when the car was 6 years old.

 

[JulesMaximus]

I bought return-to-invoice GAP insurance on a used Impreza WRX I bought from a main dealer. I got the GAP insurance from an insurance broker (not affiliated with the dealership) for about £300 (~$500) for a three year period with a maximum payout of £5,000 ($8,000).

For me it was worth the piece of mind especially since I would get a significant portion of the invoice value of the car if it were to be stolen and not recovered, written off, etc. even nearing the end of the 3 year GAP cover when the car was 6 years old.

You hope. I wonder how many people have had to collect on GAP coverage...and how easy it was to collect and if they collected the full amount. It's a game of risk. They take your money and pool it, odds are stacked in the insurance company's favor because most people don't total their car within the first year of ownership...which is why I'll never buy GAP coverage.

 

[daw123]

You hope. I wonder how many people have had to collect on GAP coverage...and how easy it was to collect and if they collected the full amount. It's a game of risk. They take your money and pool it, odds are stacked in the insurance company's favor because most people don't total their car within the first year of ownership...which is why I'll never buy GAP coverage.

Of course, like any other insurance policy you may have to fight the b*stards, but at least you stand a chance of recovering the money.

 

[KeithP]

I would advise it if you buy a used car from a not-so-reputable lot. The purchase price is usually greatly inflated over the actual value.

I would advise against agreeing to a purchase price that is greatly inflated over the actual value of the vehicle. I won't even get into buying from a "not-so-reputable" lot.

If gap insurance makes sense for you particular situation this is almost a guarantee that you are making a bad financial decision with the purchase. By something used to take the depreciation hit and put more money down.

-KeithP

 

[sactwnguy]

I bought GAP insurance on one of my new cars a few years back, it was totaled two months later while I was sitting at a stop light. I called them up, they said they would contact the other drivers insurance and the lean holder and I didn't have to do a single thing after that. The little bit extra cost for GAP insurance saved me $10k. Now I wont go without it whenever I buy a new car. I don't care how good of a driver you are, you cant stop a van going 70mph from plowing into the back of you when you are at a dead stop.

 

[RKS]

I would advise against agreeing to a purchase price that is greatly inflated over the actual value of the vehicle. I won't even get into buying from a "not-so-reputable" lot.

If gap insurance makes sense for you particular situation this is almost a guarantee that you are making a bad financial decision with the purchase. By something used to take the depreciation hit and put more money down.

-KeithP

unfortunately not everyone has stellar credit. the 'good credit, bad credit, no credit, buy here, pay here' lots are usually the only option for basic transportation for a lot of people.

buying a new car does not 'guarantee that you are making a bad financial decision' just because you opt for gap insurance.

 

[JulesMaximus]

I bought GAP insurance on one of my new cars a few years back, it was totaled two months later while I was sitting at a stop light. I called them up, they said they would contact the other drivers insurance and the lean holder and I didn't have to do a single thing after that. The little bit extra cost for GAP insurance saved me $10k. Now I wont go without it whenever I buy a new car. I don't care how good of a driver you are, you cant stop a van going 70mph from plowing into the back of you when you are at a dead stop.

$10k? How the hell were you $10k upside down in your car after only 2 months?

Didn't the guy who hit you have insurance?

 

[Bartman39]

Hummm...? Through the credit union here local it cost $6 per month to add it... On new cars/trucks it seems to be a good idea but on older used cars/trucks its not really worth it IMPO... BTW got curious and read it also includes death/disable with it...

I pitty the fool that ever hits my 2004 Dmax even with clean trade in its still worth $16K ($20K retail) and whats even better is I only paid $12K for it over 2 years ago when diesel got real expensive... Its paid for too...:thumbsup:

 

[Bignate603]

$10k? How the hell were you $10k upside down in your car after only 2 months?

Didn't the guy who hit you have insurance?

On a $50k+ car I wouldn't be surprised if depreciation between new and used for some models (even if its 2 months old) would be close to $10k.

The other guy's insurance won't pay the price for the car new, just the depreciated value.

 

[BurnItDwn]

If there is any chance that a gap will exist and you will ever be "upside down" on your loan, than you are already making a mistake and not making a big enough down payment.
Buy a less expensive car, or put more money down instead.

 

[dave_the_nerd]

Buy it through your auto insurance company - it will very likely be less expensive.

Also, yeah, try not to be upside down on a car loan.

 

[jlee]