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Gap Insurance

440 messages,  Last post on Sep 24, 2009 at 1:20 PM

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What is this discussion about? Car Leasing, Buying Insurance


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#304 of 440
Re: praz [marsha7] by care511
Nov 26, 2007 (1:04 pm)
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Replying to: marsha7 (Oct 18, 2007 6:53 pm)

What do you think of Gap insurance concerning this: We leased a Chevy Silverado and got the Gap insurance through GMAC. Our truck was totalled, they will cover that but they want us to cover the excess miles...We explained that we had every intention of buying the truck when the lease expired in a year. They say we have to pay miles. How is that?
#305 of 440
Re: You seem knowlegable... [care511] by joel0622
Nov 26, 2007 (1:40 pm)
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Replying to: care511 (Nov 26, 2007 1:01 pm)

Yes, you still have to pay the mileage charge. Your GAP policy on a lease is designed to cover the truck within the limits of the contract. If the contract allowed for 15K per year and you drove over that you pay the milage charge.
#306 of 440
Re: You seem knowlegable... [joel0622] by jforjames
Nov 26, 2007 (2:12 pm)
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Replying to: joel0622 (Nov 26, 2007 1:40 pm)

That seems crazy to me. The only reason to have an overmileage charge in the lease contract is to protect the lessor (GMAC in this case) from a losing money on the resale value of a leased vehicle that has been turned in by the lessee at the end of the contract. If the vehicle is totaled, and gap paid off the balance owed, the overmileage on the unit doesn't (or shouldn't) come into play at all. The only thing I can think of is that your primary carrier paid a little less ACV because of high mileage, and GMAC is self insuring the gap risk. So now they want to take that little less that primary paid out of your hide. But if the gap waiver agreement with GMAC says it pays the difference between what your primary auto carrier paid and the net lease balance owed to GMAC at the time of the loss, which is what it should say/do, then all that is owed GMAC should be paid off. Overmileage is meaningless.
#307 of 440
Re: You seem knowlegable... [jforjames] by joel0622
Nov 26, 2007 (2:51 pm)
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Replying to: jforjames (Nov 26, 2007 2:12 pm)

The high miles cause the truck to be worth less, in turn the insurance company is paying out less on the claim which causes the GAP claim to be higher which is money right of GMAC's pockets.
#308 of 440
eswan87 by eswan87
Nov 29, 2007 (12:05 pm)
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Just a word to the wise. Before you assume that a "cheaper" gap policy is better from your insurance company or bank or credit union, bear this in mind: Read the terms of the policy. I have seen that most policies offered by credit unions and insurance companies only cover a gap up to 100%-110% of NADA retail value of your car, which may not be near enough to cover if you have negative equity, so you may still be on the hook for thousands. Also, if you have a deductible on your auto insurance you will probably still have to pay it. Gap policies offered thru most dealers can cost a little more, but will often cover up to 150% of NADA retail and most will cover your deductible as well. Price is not everything.
Look at the coverage closely, there is a big difference.
#309 of 440
Re: eswan87 [eswan87] by jagar100
Nov 29, 2007 (1:16 pm)
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Replying to: eswan87 (Nov 29, 2007 12:05 pm)

Hypothetical Scenario:
I'm trading my car in for a brand new car. I'm upside down so they tack on $8000 to the new finance contract, in addition to the new car that I'm financing for $25,000. I purchase Gap. I drive off the lot and total it. Is the Gap going to pay $25,000 PLUS the $8000????
#310 of 440
Re: eswan87 [jagar100] by joel0622
Nov 29, 2007 (1:28 pm)
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Replying to: jagar100 (Nov 29, 2007 1:16 pm)

No GAP is going to pay the difference between what your insurance company pays and what the pay off is.
 
In your scenario it sounds like the GAP would be around $12K and yes a Ford GAP Policy would pay it plus your deductible.
#311 of 440
VW Jetta SE by vectra721
Dec 09, 2007 (6:24 pm)
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Does anyone know if VW Credit automatically includes gap insurance on its leases at no additional charge?
#312 of 440
Re: VW Jetta SE [vectra721] by airjar
Dec 13, 2007 (6:36 pm)
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Replying to: vectra721 (Dec 09, 2007 6:24 pm)

It should. GAP protects the lessor on a leased vehicle. Most leasing companies started including it several years ago.
#313 of 440
While I believe by marsha7
Dec 14, 2007 (9:14 am)
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you are correct, rather than "assume," it may be worth a phone call, or, heaven forbid, read your contract (.....) just to be absolutely sure that you ARE covered...I would hate for your vehicle to be stolen or totalled and find out the hard way you do NOT have GAP...

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