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Smart Shopper Gap Insurance
446 messages, Last post on Dec 05, 2009 at 7:59 AM
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Replying to: marsha7 (Jun 14, 2007 7:24 am) Those are the types of things that I think you should self-insure against. You'll be dollars ahead in the long term. regards, kyfdx (not the host here) |
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Replying to: marsha7 (Jun 13, 2007 6:14 pm) By the way, my credit union sells gap insurance for a reasonable amount....something like $250 for a five year loan. |
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I am unaware of the actual numbers, i.e. purchase price, down payment and the "gap" after drive-off depreciation... If it only a thousand or two, I might agree with you on not buying Gap at all...but if the gap is $3K or more, and probably increasing as the car devalues faster than the loan amortizes, Gap would be a wise investment metro123...that sounds like a great price, and I would not have thought of asking a credit union...thanks for the thought...while many do not belong, and cannot ask, so many folks do belong to an FCU and should ask when they get a loan...one of the new things I learned today!!! |
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Hello- I just purchased a brand new Camry yesterday. So far I love it and it drives great! It was a Japan manufactured model, which I hear typically proves to be better. Anyways, I have a question about the GAP insurance. I did decline this yesterday when I closed on my loan (financing through Toyota), but I am now 2nd guessing myself on this one. I paid sticker price for the car because I was upside down on my trade in... so, basically they gave me $2,000 extra for my trade-in to cover my loan and I paid sticker price. The new car is a 07 LE with moonroof, body side molding, rear spoiler, alloy wheels and a couple of other small additions. I paid $23,688 for the car, I think the final financed price ended up being 23,767. I am so paranoid that somoene will crash into me and I will end up losing on this car if it were to be totaled. I am sure the odds of this happening are slim, but now I am 2nd guessing my decision to decline this coverage. What do you think?
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Replying to: fantesia28 (Aug 09, 2007 7:24 am)  I read your posting I just purchased a 2007 Toyota Camry LE a week ago today I didn't get the gap insurance from the dealer as it was too costly, however I did get it from my auto insurance company so check your insurance company a lot of the time it's way less expensive. My Camry LE was $21,795 but I went thru Costco's auto purchasing program got it for $19,795 plus I was able to get $500 cash back from Toyota so it brought the vehicle down to $19,295 plus I got $4,000 on a trade in so I think I got a pretty good deal. I'll never go back to an American Car! I checked my mileage I get 28 mpg in the city I have the 4 cyclinder engine with the 5-speed automatic transmission
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wow - you got a great deal. I paid the price for having extra options, plus being upside down on my trade in car. I will check with my insurance carrier and see how much it would be for the gap insurance. I wasn't offered and toyota rebates... 
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Replying to: fantesia28 (Aug 09, 2007 10:03 am) |
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Replying to: louiseb (Jun 13, 2007 9:19 am) I am surprised State Farm doesn't provide GAP insurance. Another poster said Geico doesn't either. To me, that is unheard of. How can an insurance company not provide GAP insurance. I'd call again and make sure you are speaking to someone is policyholder services and not a call center representative. Most insurance companies offer GAP insurance. (I thought all did). I have AAA and they offer gap insurance. For me, having it adds a few dollars a month to my premium, which is already pretty low for someone my age (23). |
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The need for GAP ins is simple math...it is all based on the assumption that your car is totalled for any reason, such as wrecked, burned or stolen, and insurance (yours or the at-fault driver's) has to pay out what the vehicle is worth, and there is the rub... What the vehicle is WORTH may have no relation to the balance on your loan and how much you OWE...the more upside-down you are, the more you need GAP, simply to make up the dollar GAP between the car's worth and its loan payoff... You said something significant when you said that you were upside down on your trade-in...so, from the moment you signed the papers, you were already $2,000 in the hole, and that is without one dollar of depreciation of the camry... Now, look ahead 12, 18, 24 months from today...your loan will hardly be paid down at all (in any loan over 4 years, the first two years are almost all interest) but your car will depreciate a fair amount, so the GAP between your loan payoff and and what ins would pay if your car was totalled would be much larger, may approach anywhere from 3-10 thousand dollars (your Camry will probably depreciate slower than say, a Ford or Chevrolet), and that GAP would have to be paid from your pocket if your car was totalled... So, GAP pays that difference and you walk away owing nothing...considering that most of us would find it difficult to come up with $3-10K in a day or so, GAP makes sense... The choice becomes where is the best place to buy inexpensive GAP ins, and that is better answered by other posters here...I paid between $300-400 for my two vehicles, and I bought it from the dealer, as it was a minimal amount added to my loan...others buy it elsewhere, and that is OK, too... But, unless you put at least 20-30% as a down payment, you probably need GAP, and you will probably regret it if you do not have it and your car is totalled... I recommend it highly, as high as medpay on your auto insurance, but that is my ranting on another topic...
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