Gap Insurance

someone who owes more than their car is worth and can't afford to cough up the difference in case their car is totalled.

being "upside down" on a loan is a scary thing, but many people are.

 

<div class='quotetop'>QUOTE(priusmaybe @ Apr 30 2007, 10:36 PM) [snapback]433027[/snapback]</div>

Ask Lively Chick.

 

If you have teen aged drivers you need gap insurance .

It paid off for me when my son totaled his car. And now days it does not take a lot for the insurance companys to "total" a car.

 

I'm on the interest-free 24 month loan. The finance guy skipped over the gap insurance spiel, saying I was unlikely to ever be upside-down on the loan. I guess it makes sense, even with the adage that cars lose half their value in the first year

 

this is another one of those departments that the dealer likes to force on you. keep in mind you can get gap insrurance from just about anywhere you do not have to take the dealers gap carrier. your own insurance company might even include gap coverage in your policy if you notify them of the purchase

 

Actually, Kelly Blue Book has my "06 listed at $18,225 for "Trade In Value" right now. However, the "suggested retail Value" (what a dealer may charge for the vehicle) is $25,390. Who knows, that one vehicle I've totalled, I was glad to have the gap insurance. But it will depend on the vlaue of your car, the length of your loan, etc.

 

<div class='quotetop'>QUOTE(Godiva @ May 1 2007, 12:12 AM) [snapback]433045[/snapback]</div>

Yep. I needed it, and it worked. I recommend it to anyone who isn't paying a lot down on a new car.

(Or, like me, rolling negative equity into a new car...)

 

<div class='quotetop'>QUOTE(livelychick @ May 1 2007, 08:28 AM) [snapback]433139[/snapback]</div>

Trust me (And lively chick) its worth the extra $200. I needed it when a friend totalled our '00 corolla which was conventionally financed with zero negative equity. So its not just for negative equity situations...(in that case you should always consider it)...otherwise you could be up a creek in a situation like lively chicks...

When we bought our Prius we actually had to ask them for it this time...(bet they were surprised)

 

<div class='quotetop'>QUOTE(Darken @ May 1 2007, 10:40 AM) [snapback]433201[/snapback]</div>

Gap insurance pays the difference between the market value of your car and the amount you still owe on it when it's totaled. If you don't owe more than it's worth, gap insurance does not benefit you in any way that I know of.

 

Gap Insurance? I figure that clothes made at The Gap are pretty cheaply constructed, they're liable to break and tear at any moment!

We got the Gap Insurance for our Prius. It was only $199 and worth it in my opinion.

Dave

 

<div class='quotetop'>QUOTE(Highly ImPriused @ May 1 2007, 10:47 AM) [snapback]433208[/snapback]</div>

Another point I forgot to add is despite the resale value of the prius being better then most, you are going to owe more then its worth during the early stages of your loan in most cases (regardless of the loan)...I guess the bottom line is you know your financial situation so make the decsion that works for you, but $200 is nothing compared to the peace of mind you have in the event of a total loss.

 

Why would anyone pay $200 for GAP insurance up front? What a terrible investment.

GAP insurance on my auto policy adds $14 every six months, or just under $30 per year. The $200 you pay your dealer for GAP insurance up front will buy you over 7 years of GAP insurance on your standard auto policy. You probably won't have your Prius that long.

Call your insurance company, see how much GAP is through them -- you'll end up saving money.

 

<div class='quotetop'>QUOTE(PriusBoyAZ @ May 1 2007, 09:32 AM) [snapback]433285[/snapback]</div>

I purchased GAP through my dealer when I got my Pri 4 weeks ago for $700!! Yesterday I found out from my auto insurance they could do it for $9 every six months... that's like a $600 difference. I got ripped...

Does anyone know if dealer GAP insurance is refundable like the extended warranty is after recently buying a new Pri? I'm going to try and have the dealer refund me... they won't like it though... I don't see why I can't have it refunded and have the prorated amount refunded... right?

 

<div class='quotetop'>QUOTE(priusmaybe @ Apr 30 2007, 08:36 PM) [snapback]433027[/snapback]</div>

My insurance company, 21st Century, pays the full new car replacement value in case of a loss during the first year of ownership. That does away with the need for gap insurance. Check with your car insurance company before you buy gap insurance.

 

Ok, so I got the dealer to refund me the GAP I bought through them ($700) for $1.50 a month through Safeco.

So let me get this straight... If I wreck my car and Safeco declares it a total loss... (I currently owe $31,000 or so on my loan with Capital One (1st payment coming this month) with about $6000 negative equity rolled in from a trade-in) then Safeco would pay off the worth of the car, plus the difference in total loan amount (GAP) to Capital One. And I wouldn't have a car or car payment anymore? Would I just start from scratch/clean slate, having to find a new car, etc...? I think Lively Chick is in this scenario currently... you there?

Would Safeco cover the FULL difference (including the negative equity from the trade-in, after-all, is IS included in the total amount of the loan used to purchase the new car (which is what their policy states).

The dealer also mentioned how Safeco, trying to make/save money, in this situation would try as hard as possible to have my car repaired instead of declaring it a total loss and assuming that extra $6000 on the loan amount... which would leave me with a not so perfect repaired car if the accident was extreme... what do you think?

 

<div class='quotetop'>QUOTE(surfacinglove @ May 3 2007, 01:52 PM) [snapback]434851[/snapback]</div>

Wow! Nice Job in getting the dealer to refund your money, that was a rip off no matter how you slice it. If this thread has taught people nothing else, look into GAP through your Insurance Company its worth the dollars for peace of mind and obviously much cheaper then you may ever find at your dealer.

Now as for your question. The whole purpose of GAP is to cover the full balance on your loan regardless of the current market value for your vehicle in the event of a total loss. It doesn't matter what you wrapped into the loan...the balance is paid in full and you start fresh in looking for a new vehicle. Its primarily geared for anyone with a negative equity situation, but as I mentioned previously everyone is in the same boat in the early stages of a loan.

I'm not sure what to tell you about your insurance company. It is a valid assumption that with GAP on your policy they may do more then the average company to prevent a total loss from occuring, but that is really out of your control. Either way your covered.

 

guys, it's just gap insurance. Not GAP insurance. GAP doesn't stand for anything. Quite literally, it insures the gap between what you owe and what the car is worth.

 

It seems to me that if you are in a situation where you owe more money on a loan than what the car was worth. maybe buying a new car wasn't the best idea, financially. Having to buy insurance on top of that makes it even a worse idea.