Should I add GAP Advantage and Extended Warranty?

[fuzzybabybunny]

I'm about to pull the trigger on a new Crosstrek XV next week. Going to get financing through PenFed at 1.99% for 60 months.

GAP Advantage - $349 or $6 / month - In the event your vehicle is stolen or totaled, GAP pays the difference between the insurance company payment (actual cash value) and the loan amount including your deductible up to $1,000. With an additional benefit of $1,000 towards a replacement vehicle and a 60 day free trial. It’s worth a second look.

Extended Warranty - $24 a month for 60 months = $1,440 - Protect your vehicle with bumper to bumper coverage in the event mechanical breakdown occurs. With a $0 deductible and 100% coverage on parts and labor for approved repairs, the benefits outweigh the cost. Try it risk free for 60 days and we are sure you will feel the same.

$0 deductible
Includes 24-Hour roadside assistance
Coverage: 5 years or until the odometer reaches 100,000 miles; whichever comes first.

 

[michal1980]

1) are you putting any money down?

2) IMHO the only worthy extended warranty is from the manufacture.

 

[fuzzybabybunny]

1) are you putting any money down?

2) IMHO the only worthy extended warranty is from the manufacture.

1. No, no money down. Why?

2. Why is that?

 

[Greenman]

I thought most lenders required gap coverage if you had no cash in the deal?

I'd skip the warranty. I've never had a major repair in the first 100k of owning a new car, not even in the first 200k.

 

[EagleKeeper]

Get the GAP if you are putting little money down.

 

[michal1980]

1. No, no money down. Why?

2. Why is that?

Get the GAP if you are putting little money down.

1. No money down means you'll likely be underwater on the loan for the first few years. IE if your in a car accident and the car loan is for 20k, but the car is only worth 15k. You'll be on the hook for the difference.

I would ask your insurance company what the would charge for GAP insurance. It might be cheaper, and you can cancel it (about midway through your loan you are typically safe to cancel debt)

 

[boomhower]

I bought both for my wife's car. For me it was worth the piece of mind.

 

[fuzzybabybunny]

1. No money down means you'll likely be underwater on the loan for the first few years. IE if your in a car accident and the car loan is for 20k, but the car is only worth 15k. You'll be on the hook for the difference.

I would ask your insurance company what the would charge for GAP insurance. It might be cheaper, and you can cancel it (about midway through your loan you are typically safe to cancel debt)

Oh, I see. OK, GAP protection then. No on the extended warranty.

 

[RossMAN]

Oh, I see. OK, GAP protection then. No on the extended warranty.

That's what I would do, unless you can find a killer deal (link for reference only) from a Subaru dealership.

 

[kitatech]

As for extended "warranty"....if your dealer/its insur. company will refund it if unused over the term then it could be a reasonable deal.

 

[michal1980]

Oh, I see. OK, GAP protection then. No on the extended warranty.

Yes. But be sure to ask your insurance company first.

My insurance company charges roughly 60 dollars a year for gap insurance. And I only needed it for 2 years. After the two years were up. I canceled it. So instead of paying ~400 dollars to the dealer. I paid 120.

 

[nerp]

You can buy an extended warranty from the manufacturer just before the factory warranty runs out. It will cost more than tacking it on when the car is brand new, but you still can. So there's no rush.

 

[BlitzPuppet]

I skipped gap on my new car, but I did put money down.

I am told it's a good idea if you are leasing though.

 

[M0oG0oGaiPan]

if you pay the car off early you can get some of the gap money back.

 

[heymrdj]

Always GAP on a car, always.

My civic was 8 months old when it was totaled by a senior citizen, I would have been on the hook for about 3.5k if it wasn't for GAP (he had state minimum and with all the property damage, my own insurance had to cover the car).

 

[ponyo]

I didn't get GAP on my last car purchase and I put no money down. But I'm the type who pretty much never purchase insurance unless it's required by law.

I wouldn't bother with extended warranty unless it's manufacturer. And then you have 12 months to shop around dealers for the cheapest price. After that the price will jump.

 

[Pacfanweb]

I never buy GAP, it's a ripoff.

But I'm not dumb enough to finance the entire selling price of a new car, either, so it doesn't matter.

If you buy an ESP, definitely only get the manufacturer's. All dealerships that sell that brand honor it. All dealers do NOT honor aftermarket plans, and aftermarket plans are a PITA to deal with.

 

[MrWizzard]

I never buy GAP, it's a ripoff.

But I'm not dumb enough to finance the entire selling price of a new car, either, so it doesn't matter.

If you buy an ESP, definitely only get the manufacturer's. All dealerships that sell that brand honor it. All dealers do NOT honor aftermarket plans, and aftermarket plans are a PITA to deal with.

Your gonna be a great old man some day. If you are not one already sir.

OP do a little research Gap can usually be got for $100s less through your insurance than the dealership, if you need it. In CA dealerships will sell gap for $600, through insurance it can be $10- $20 a year. Also check if you can get an extended warranty though your insurance. You can sometimes get the same quality in an extended one for $100s if not $1000s less. Do some research, before you make your decision, and you will feel more comfortable with your decision. Deanship’s GAP and EW are how they make money so they tend to jack those up.

Ultimately you have to live with your choice so understanding why you made it will help instead of just going “well some guy on the internet told me to do it…”

 

[postmortemIA]

I get significantly lower offer for extended warranty. Even then I didn''t get it. The car is under my control, so if there are any problems in first 3 yrs when existing warranty is available, I can reconsider.
Think of it this eway: they are betting that cost of repairs on average will be less than what the total cost of insurance is.

 

[Naeeldar]

Always GAP on a car, always.

My civic was 8 months old when it was totaled by a senior citizen, I would have been on the hook for about 3.5k if it wasn't for GAP (he had state minimum and with all the property damage, my own insurance had to cover the car).

Sorry but it's entirely dependent on how much money down you are putting. I put 30k down on my last car - there was no way in hell I was buying gap as I already had 50% equity.

You only buy GAP is you have no equity. however, if you can't put a down payment wtf are you buying the car for. I mean I love cars I drive a very expensive car and waste thousands upon thousands on cars. BUt there is no way in hell I could tell somebody to buy new if they can't even put a down payment down on the car. It's a massive financial mistake.

 

[heymrdj]

Sorry but it's entirely dependent on how much money down you are putting. I put 30k down on my last car - there was no way in hell I was buying gap as I already had 50% equity.

You only buy GAP is you have no equity. however, if you can't put a down payment wtf are you buying the car for. I mean I love cars I drive a very expensive car and waste thousands upon thousands on cars. BUt there is no way in hell I could tell somebody to buy new if they can't even put a down payment down on the car. It's a massive financial mistake.

I don't believe in down payments. at .9% there's really no need to. If you can't afford the monthlies you could never afford the car in the first place. By GAP+no down payment the Bank assumes the risk of the car going under. Why would I put 30k down on a car, and lose 25% of my cash driving it off the lot if it got totaled that month, if I could have paid 40$ a year for GAP coverage plus less than 500$ in interest for the whole year (assuming 50k loan) and the bank have to eat the rest.

Minimize this to my civic. I paid 500$ OTD for the civic. 20.7k was the price of the civic. Paid 8 months (1,840$) in payments and the car got totaled by a senior (as I stated earlier). The car was valued by insurance at 16.9k. Had I not gapped the car I would have been on the hook for the difference there. In the end I won out financially.