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Gap Insurance

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  • fantesia28fantesia28 Posts: 15
    I ended up purchasing Gap insurance through Toyota... They wanted to charge me $585, but I got them to lower the price to $485. I was way upside down in my Camry because it lost so much value over the past 2 years due to high mileage and the economy that I had to purchase some sort of gap coverage.

    For those who are considering this coverage, most dealers will negotiate the rate of the coverage! Definetly worth at least asking! I basically just told them that my credit union offered gap for considerably less money and he moved on the price. :)
  • jagar100jagar100 Posts: 14
    Why do people purchase GAP through the dealership in lieu of the insurance? Insurance carriers charge a fraction of the cost, and now some even offer "replacement" coverage.
  • marsha7marsha7 Posts: 3,676
    This is just a guess, but I think that GAP seemed to be issued by more dealers in the past, but it does SEEM now that more ins agents are getting involved in the process...and maybe my viewpoint is skewed... ;) ;)
  • joel0622joel0622 Posts: 3,302
    Because allot of them sell waiver addendums and not insurance policies, about 80% of the policies I have seen written by insurance companies pay up to 110% where what a dealer sells covers 150%, plus do you really want your insurance company to be the one to decide if they should total your car and pay a big [non-permissible content removed] GAP claim or should they not total it and fix it for half that? Which way do you think they are going to lean? :D We sell cars to an agent for Farm Bureau, and he buys our GAP for that exact reason.
  • I am buying a 2008 Toyota, and need to reduce the amount I am financing so am looking on the internet for gap coverage. Almost everything I find says somewhere in the fine print that they are connected to Lee and Mason in some way, and that they will not write GAP insurance for any car loan with interest rate over 12%. My rate is higher than that. My car ins. company does not offer GAP for used cars (Nationwide/Allied).

    Can someone tell me where I can get GAP insurance for a 1 year old used car, 72 month loan, interest rate over 12 percent. 60 months would be OK. If you have a web site address that would help. I have tried so many that say variations of gap auto insurance in the web site address and they all end up being connected to Lee and Mason somehow.

    Thank you very much.
  • joel0622joel0622 Posts: 3,302
    Does the dealer not offer it?
  • Joel,
    Yes, the dealer offers gap waiver insurance, but they want $600 for it and that's too expensive for me. I need to get the total amount financed down and with having to also make a down payment to reduce the financed amount, I have nothing left to also pay the $600 out of pocket so I can keep the total amount I need financed down.

    It looks like every gap policy in the country that an owner can purchase as an individual somehow comes through Lee & Mason even though you can buy it from a lot of web sites. All mention Lee & Mason as their agent. But Lee & Mason cap the interest rate you can be paying on your loan at 12.9% and unfortunately, I can't find a lender at that rate these days. (Hard for even me to believe, but, it's true).

    My research is indicating that: 1. Some regular auto insurers offer gap insurance but seem to be for new cars, not used, and you have to have all your auto insurance with them. 2. Dealers can get gap waiver insurance where they and the lender forgive whatever is left to be paid on the loan if there's total loss of the car. 3. Individuals like me and you can buy gap insurance on the internet from companies that will sell you the insurance all by itself, and it can be for used or new cars, but, it all seems to come through Lee & Mason with the restrictions of: no more than 12.9% interest on loan, no more than 84 mo. on loan, 110 to 120 percent of value of car and a few other things. 4. Drivers Select offers a "Total Loss Protection" deal for $299 which allows higher interest rate and used cars, for 60 months but I can NOT understand how it works no matter how many times I read it, and when I try to call, I can hear the number being forwarded and then a guy comes on and says they are "certified" something or other and to leave a number and they will call back. I know their site links to a warranty site called certified. This may be because it is a Saturday, don't know.

    I don't know if this will work for me or not. I can't afford to be left with thousands of dollars to pay if I lose the car. If you or anyone else can explain how this Driver's Select works, I'd love to hear. My question mostly is, what value are they putting on the totaled car? Where do they get it from? Here is the link: http://www.gap-insurance.com/indexTL.htm

    IF you click anything else on the page, it takes you to their regular gap insurance, and to return to the Total Loss page you have to click the above link again.
  • joel0622joel0622 Posts: 3,302
    Joel,
    Yes, the dealer offers gap waiver insurance, but they want $600 for it and that's too expensive for me


    I can't afford to be left with thousands of dollars to pay if I lose the car

    So pay the extra $12 a month and buy the GAP.

    Over $300 I would most definitley want the contract in my loan and by some third party fly by night.

    As far as the insurance companies go. Do you really want the company that decides weather your car is totaled also being the one that handles your GAP insurance?

    Think about it. If the repair is less then the GAP guess what, there fixing your car. Where if the GAP is with a third party they will not care and probably total it.
  • Joel,
    My insurance company does not do GAP for used cars, so, I was not considering using them for GAP. And the problem is, I may not get financing for the car if I include the $600 GAP insurance in the financing contract. I think it would be the best way to go if I could also get financing, but, right now I have to reduce the amount I am trying to finance or I'm not going to be able to get any. It's a tough world out there credit-wise these days.

    I am trying to find a company that offers GAP insurance for a 2008 car with a high interest rate loan. If you or anyone knows of such a company, please let me know. Thanks!
  • madmanmoomadmanmoo Posts: 2,039
    Why do I get the feeling that you're about to find the company on your own accord and then post the results to us here?
  • Kirstie_HKirstie_H Posts: 10,914
    Nothing wrong with it if she does. The host Fraudulent Endorsement Detection System functions very well. :)

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  • madmanmoomadmanmoo Posts: 2,039
    Hahha, FEDS. I like it!
  • dtownfbdtownfb Posts: 2,915
    I think you are onto something.

    kelliann: have you ever thought about getting a cheaper car? You seem to be stressing over this purchase. Plus it appears you are at the upper limit of your credit if $600 is going to somehow disqualify you. And to be honest a six year, high interest loan on a used car in this economy is probably not the smartest move.

    Why not look for a 2006 Camry instead or a cheaper car? I know it the older design but it should be a few thousand cheaper and near bullet proof in reliability since it was the last year of that design. You can find plenty of Camrys with 40k-50k miles for around $13k.

    Why not look at a new Sonata? Hyundai has been very aggressive this year in sales and you may be able to get a new Sonata for the same or lower than a one year Camry. The Sonata is rated the same as the Camry.
  • sheesh...they (dealer) didn't even mention gap insurance when I just bought my new Mazda (may be typical w/a loan vs. a lease but dunno why...exposed is exposed eh). need to check my loan app but something tells me I've got a hole here...then need to call them (lender) next week. Ran that website just for grins and for the term/amt of loan, it came up $384. I assume thats a one time charge/life of the loan or possession of the vehicle (whichever is shorter) and not a yearly? (it BETTER be ;)) ...Dave
  • marsha7marsha7 Posts: 3,676
    That should be the total premium, most likely...so, spread over 48 monthly payments is under $10/month...to me it is worth it, to some it isn't...if the car is totalled in the first 2 years, you may be quite glad you have it...as the vehicle loan balance goes down, the policy is worth less and less, but if you are upside down, say, $7-10K in years 1 and 2, the policy will be quite valuable
  • If it's a website associated with Lee & Mason (I work for this agency), it's life of loan coverage (of course coverage ceases when loan is closed out early due to payoff).
  • dtownfbdtownfb Posts: 2,915
    Do you really need Gap insurance? Mazda's hold their values pretty well.
  • madmanmoomadmanmoo Posts: 2,039
    Hahah, yes, they still need GAP. Mazdas depreciate just like any other car and more than quite a few.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,648
    Unless you've put around 20% cash down on the car, you're going to be upside down on a 72 month finance no matter what car it is. Your down $3000 bucks right out the door on most cars you buy.

    On some luxury cars, depreciation is BRUTAL. :cry:

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  • I put down roughly 8% by paying the TTL up front in this case and financing ONLY the vehicle...and in todays economy, I'd think GAP would be virtually mandatory for consumers and its surprising how few have even heard of it let alone are aware of the value of it. My dealer didn't even offer it at the time of the sale (and I'd been there for over 4 hours w/a 5 1/2 year old AND a pregnant wife so needless to say I was anxious to wrap up and didn't even think of it, let alone notice the little NA on the side where it said gap insurance); so I just missed it (too bad so sad) and now I'm too late to get it thru them or my lender, so here I am shopping...
    and so it goes...ah well...luck O the Irish ;) :shades:
  • marsha7marsha7 Posts: 3,676
    While this is seat-of-the-pants math, almost any loan over 48 months you will be seriously uspide down for a number of years, unless, as you say, the down payment is at least 20%, and probably more like 25-30%...so many cars depreciate so rapidly, and the loans are paid down so slowly, that the gap is quite wide in the first 3 years...

    This is even more so if you roll over negative equity from the trade-in, then even a 25% down paymt probably does not help much at all...

    Unless one had $5,000-10,000 sitting around to pay the gap, then gap insurance may be a wise move for most folks...even if you DO have the 5-10K, paying an extra $10/month for the insurance to pay that gap may still be a smart move, rather than depleting your cash stash...

    Run the numbers and see if the gamble is worth it for you, and always use the worst case scenario for your math, like totalling the car in Year 1 or 2, as that is when gap ins does you the most good...

    Also, remember, I don't care how good a driver YOU are, it's the other guy who may be uninsured when he T-bones you and totals the car...
  • exactly, which is why I carry a standard level (vs. TX minimum) of uninsured/under-insured motorists coverage as well; I trust me, I trust no one else :shades:
  • marsha7marsha7 Posts: 3,676
    Not to overdo it, but I carry $100K UM as a basic policy, with a separate $1 million umbrella...after seeing a number of cases where the injured had meds over $250K, and the at-fault driver had minimum limits of $25K, I could see the need for extra insurance in the case of loss of limb, loss of life, or simply serious injury...the add'l $$$ could make life easier if one was unable to work...but that's just me...
  • I've got the 100/300 for the UM as well but 1M umbrella? just what is an umbrella policy and how much is 1M worth of coverage?! (yikes) :surprise:
  • never mind.Right after I posted the other reply I said 'duh', go wiki the thing which I did so I now have the task of pricing that tomorrow w/my provider. Really good idea...thanks.
  • marsha7marsha7 Posts: 3,676
    I realize that I may be in the minority with a $1 million UM umbrella ($175/year)...but, as a PI attorney, I have seen medical bills easily surpass $250K, and the injured party, now permanently injured, walk away with only $25K or $50K because that was the insurance limit that the at-fault driver had...suing them would do no good, as they could dump the judgment in Chapter 7 bankruptcy...

    If the victim had their own UM, and the $1 million umbrella, they could have recovered against their own UM (under-insured, along with uninsured)ins and not been destitute after the wreck...

    From a layman's standpoint, the odds of ultra serious injury are quite low, but from a PI attorney's view, this scenario happens more often than one might think, so I see the need to protect myself and family...and, with the cost of an add'l $175 per year, it is not prohibitive...but if one of us was seriously injured, I have a way to recover if the illegal immigrant was uninsured, or the 25 year old deadbeat bought his minimum policy off some TV ad...

    YMMV...
  • hhmmmm, excellent advice/view mate...appreciate the feedback; makes me wonder though that if you're the victim in the accident and have to recover against your own policy via the umbrella due to the no-neck being UM, how long it would take your insurance company to drop your butt once they've paid out on it...and good luck finding another insurer once they discover that eh...
  • dtownfbdtownfb Posts: 2,915
    First off , why are you financing a car for 72 months? maybe buying used is a better option for this person. (I know, i know, used cars are not good enough for most people).

    I understand the logic shifty and marsha7 but I don't see Gap insurance as a "must have". Why finance a car that depreciates quickly for so long? You may as well buy an extended warranty and the service contract.
  • marsha7marsha7 Posts: 3,676
    down: It all depends on your financial situation...unless you finance under 3 years, or place a substantial down payment (25% or more), the odds are that your vehicle will depreciate much fatser than the loan balance is paid down...hence, the "gap"...look at an amortization table for your loan, and assume that your vehicle will drop at least 25% in year one, 50% in year two (esp if made by UAW)...if your vehicle estimated value and loan payoff are never over $1000, then gap is probably not necessary...but if that gap is over $2,500, then gap for a measly $10/month can be quite useful...if you are leasing, it is even worth more because you owe the full amount of the lease no matter what, and the insurance that pays for the "total" will certainly not pay off the lease...since most folks do not have $2500 sitting around to pay off their loan, I recommend gap, almost always...that being said, it is only my reco...if you wish to assume the risk, please do...but many folks reading these posts have no idea what gap ins is or what it does, so my postings are an attempt to tell them why I think it is wise to purchase, but no one has to do so...this is a supposedly a free country, altho much less so at the end of this administration...

    wd: "if you're the victim in the accident and have to recover against your own policy via the umbrella due to the no-neck being UM, how long it would take your insurance company to drop your butt once they've paid out on it...and good luck finding another insurer once they discover that eh... "...I believe that is no longer important...if you are sufficiently injured that you must recover pain and suffering from a $1 million umbrella, the last thing you need to worry about is if they will drop you, as your condition may be such that you are unable to work again, and you have to invest and live off the settlement...whether they raise your premium 25% or you need new insurance is hardly the 1st priority if you are injured that seriously, IMO...also, don't forget...you can only recover assuming that the OTHER guy is at fault, so you may not be dropped at all...now, if YOU cause the wreck, then you have no recovery at all except for medpay to pay your bills, if you have medpay on your policy...

    This is only my belief, considering what I have seen from folks who are were seriously injured and did not have sufficient UM, and, with 20/20 hindsight, if they had had it, they could have been adequately compensated...

    Further, it is my belief, without any proof at all, that there is a percentage of folks out there who probably cause a disproportionate amount of accidents simply because they are bad drivers, so they are the ones who statisically may drive and have little or no insurance, when they are the ones who should carry it the most...adequte UM protects you from those folks, altho it actually protects you against EVERYBODY with insuff insurance...last year I had a case where the father makes very good money, but he scrimped on his insurance...$50K in liability but only $25K in UM...I could not understand why...
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,648
    "that there is a percentage of folks out there who probably cause a disproportionate amount of accidents simply because they are bad drivers

    I don't think people in Boston are going to like you talking behind their backs :P

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