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Gap Insurance



  • dtownfbdtownfb Posts: 2,915
    I understand the entire argument you are presenting marsha7 and don't disagree. But after this housing/credit mess that caused us to be in this recession, I just think we need to change our spending habits. If you need a new car, put 20% down and don't finance a car for more than 5 years. Can't afford that, than buy used or save up the money.

    Who knows? I might be overreacting.

    You blame the current administration for our "lack of freedom", I blame our past couple decades of living beyond our means, greed and corruption. What is happening today is a direct result of living beyond our means. $700B for the banks, another $790B to keep the economy going. And unemployment is at 9.4%. Personally, I am working on paying off all my debt (except home and car) so I can handle whatever the government can dish out.
  • dtownfbdtownfb Posts: 2,915
    Actually I thought he was talking about my sister in law....
  • marsha7marsha7 Posts: 3,666
    "I just think we need to change our spending habits. If you need a new car, put 20% down and don't finance a car for more than 5 years. Can't afford that, than buy used or save up the money"...I cannot disagree with you there, but a downstroke of 20% on a 5 year loan would, IMO, have NO CHANCE of keeping up with the depreciation, especially if it is an American car...except for maybe Corvette, no GM car will be worth 50% of its purchase price in 2 years, whereas the loan payoff in 2 years, with 20% down, I think will be thousands of $$$ higher than the vehicle value...if totalled in first two years, then the owner will have to come up with thousands out of pocket, which most cannot, all my arguments is this: gap insurance at a measly $10/month will remove that stress, and the cost is nominal...I do it for the stress relief...if you don't want to, don't buy it...but it IS an intelligent way for folks to protect themselves from a major payout with money they do not have...

    I was PO'd at Bush for the first bailout as much as I am about Obama...most conservatives (altho I consider myself mildly moderate...:):):)...meaning just to the left of Attila the Hun) were upset at Bush for No Child, Medicare Part D, and Bailout...and a few other things as well...
  • If you are able to pay off a new vehicle or even put a large portion of it on say a HELC, you can consider New Car Replacement. Kind of like GAP but you don't have to have a loan. I'm with Allstate and bought a Saturn Outlook August 2008. Put it on the HELC and several months later when we sold a lake-front cabin in Ark. I used the capitol gain on that to pay off that amount on the HELC. The new car replacement would replace the vehicle with a new one for the first 3 model years. IIRC it was about $5-8 per month. I increased deductible from $250 to $500, but they give you a $100 reduction each year you don't use the deductible so that dropped to $400 and this year will drop to $300.

    Also, 15-20 years ago we added a $1M umbrella policy. It covers our house, lake behind the house, pool, vehicles, etc. liability. IIRC it is between $300-$350 each year. Just looked it up $336 a year. I hate paying insurance, but the alternatives if the worst happens are unplesant to worry about. Of course, before I accumulated some assets it there was not as much risk as there is now.

  • dtownfbdtownfb Posts: 2,915
    I'm actually pretty moderate myself. We need to start living within our means. That hurts businesses because we don't spend as much but in the long run it's better for this country. Just wish we had more than two choices.
  • I'm going to lease a 2010 Base Rav4 4x4
    first month and dmv down
    all taxes rolled into $279 a month payment for 36 months
    0% financing

    Dealer says Gap Insurance is $20 a month. My state doesn't offer outside insurance companies for Gap Insurance.

    Given that everythng is rolled into the payment and the financing is 0% and that the resale Kelly Blue Book value of Rav4 4x4 is high... does is make sense get the GAP insurance or not? Obviously if I don't have to spend the extra money I'd rather not. Can't quite figure out how much I'd be at risk if any given the specifics listed above.
    Thanks for the advice in advance.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,422
    All people on a lease should have gap insurance. If that car gets wrecked you are going to be totally screwed without it. Remember, as a "renter" you don't own this car, and your lease payments are nowhere near those of the person who buys this car outright----therefore, you KNOW you are upside down in this car from the get-go.

    Whether the wrecked car was leased or purchased, it has the same value. Without a big down payment, you will find yourself responsible for the difference between what insurance pays off and what you owe on the balance of the lease. And that difference is not going to be pretty.


  • Every lease I have ever done has had GAP insurance included from the get go. Check with someone who has experience leasing Toyotas to make sure you aren't getting hosed over here.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,422
    That's true...$20 bucks a month sounds pretty steep for gap.


  • Yup very expensive for GAP. GAP is usually only a few dollars a month on a 60 month finance. I think the default charge for GAP on most of the cars we sell is 675 and of course cost is a couple of hundred less.
  • kyfdxkyfdx Posts: 27,708
    ..doesn't include GAP on their leases...

    I agree... $20/mo. is outrageous...

    Offer him $7/mo., and threaten to go get a CR-V, if he can't do that... :) (Honda Finance includes GAP on all leases, at no extra charge)

    Prices Paid, Lease Questions, SUVs

  • Can anyone tell me what insurance carrier Criswell Honda of Germantown uses for the GAP insurance? After a horrible car buying experience with them I realized that that I ddn't need GAP and would like to cancel it. Unfortunately, Mr. Kolo, their finance officer, did not provide me with a full copy of the contact with the address and will not respond to my e-mails and phone calls. Help!
  • I am planning to purchase a new car - I am putting down a good-sized down payment (it'll work out to something like 35% of the car's final price). I can't imagine that I would ever owe more than than its worth. I'm wondering if I really need it and I'm thinking "hell no"!
  • qbrozenqbrozen Posts: 17,150

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • marsha7marsha7 Posts: 3,666
    No. The only purpose for gap insurance is to make up the difference between what you owe and the value of the car, and this comes into play only if you put a small down payment and drive away from the dealer upside down...

    If your amount that you owe is about equal to the car's value, than gap would be a waste of time.
  • Where would one buy gap insurance? I'm trying to find a reputable widely known and used gap insurance vendor. Geico doesn't offer gap insurance which is my insurance company.
  • qbrozenqbrozen Posts: 17,150
    for a car you own or are shopping for? Dealers typically offer it. Just make sure you negotiate down the price because it is also typically expensive.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • marsha7marsha7 Posts: 3,666
    do offer it, altho your doesn't, but almost all dealers do offer it...I assume the price is negotiable, it never hurts to try...
  • imaginaryimaginary Posts: 59
    edited December 2011
    Does anyone know of anyone else who offers gap insurance besides dealers?
  • yt576cyt576c Posts: 6
    My CU ( DCU) offered gap insurance for 1 time payment of $250 to $300. But I ended up taking GAP from the dealer as he did a price match to this price - $250. The initial quote he gave me was $750.
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