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Smart Shopper Gap Insurance
440 messages, Last post on Sep 24, 2009 at 1:20 PM
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Replying to: art_vandelay (Jan 10, 2008 2:44 pm) Yes, the reason being is that in order for your insurance company to complete the claim and sell your totaled car for salvage they have to have the title. In order to get the title the loan has to be paid in full. There are exceptions to every rule and you may be able to make payment arrangements with them. But then hope it does not create a problem when you go to finance you new car. Basically you would still have an open auto wanting to add another one and you would have to budget for that. There is also the possibility of rolling the deficiency into your new loan, once again you would have to qualify for it. You can still purchase GAP from a dealer at time of sale even if you are not financing with them. It really is no different then buying a warranty from them if you are not financing with them. They just include the cost in OTD price and list your CU as lien holder on the GAP Contract.
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Replying to: joel0622 (Jan 11, 2008 6:09 am) |
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"Meaning, I'm sure the insurance company pays out the settlement amount directly to the lienholder, but then does the lienholder demand immediate payment on the difference?" Yes, they will not let you continue to make payments, you must come up with the difference immediately, or 30 days, so they can sell the salvage title... It is my experience that most folks would have serious difficulty cutting a check for say, $7-10 grand that quickly...considering that GAP, even if purchased thru the dealer who charges more, would still only be $10 monthly if $500 premium, which covers you for at least 3 of a 5 year loan and probably 5 of a 6-7 year loan... If you put down at least 25% or finance under 3 years, GAP probably not necessary, since your loan balance and value of car probably amortize at the same rate, i.e. you probably owe what the car is worth if totaled, so your regular insurance would pay out enough to pay off your note...
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Replying to: marsha7 (Jan 11, 2008 11:27 am) Marsh, the dealer does not always charge more. We have Customers who are Agents for Farm Bureau and they buy our GAP because it cost less and because it is a Insurance Policy and not a Waiver Addendum. Ours also covers the deductible up to $1000 theres is $500, and ours covers 3 payments while the claim is being processed where with theres you have to continue to make payments on a car you are not driving while they process the claim. So, though you are correct in that you can find a cheaper (not less expensive but cheaper) policy keep in mind it is cheaper for a reason. |
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good to know...I happen to buy all my Gap policies thru the dealer and roll it into the payment, but many posters on this topic have stated that they can get it much cheaper thru their own auto ins agent... wherever they get it, it will be cheaper than paying out the $7-10K if the car is totalled in the first year or two, when the depreciation is the max but the amortization on the loan is the min... 
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USAA charges $170 as a one time fee for GAP insurance. My dealer wanted $700, but they ended upmatching USAA when I told them - lol GAP was important to me, because I financed the whole value of the car. I used my trade to pay-off my other car loan (we have three cars), so rather then having two smaller loans, I have one bigger one. As a result, GAP seemed like a must have for me.
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Replying to: joel0622 (Nov 29, 2007 1:28 pm) Keep in mind, banks have rules about how much you can borrow on a car in the first place. Some banks limit loans to 80% of MSRP while others (like USAA) will loan up to 120% of MSRP. USAA charges $170 for gap insurance (at least that is what I was quotted) but the amount may vary for the borrower depending on the situation. US Banks gap insurance works the same way too.
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Replying to: waterdr (Jan 20, 2008 6:51 pm) Yes it is correct, I think you misunderstood the question the other posters asked. The question was: Is the Gap going to pay $25,000 PLUS the $8000???? The GAP does not pay $33K. It pays the difference after the insurance company settles, based on the coverage.
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Replying to: waterdr (Jan 19, 2008 8:17 pm) I have a question. Can you tell me what USAA stands for and if you can, can you please give me there phone number.? I have been looking high and low for a company to give me GAP and I am having a hard time trying to find one. Thanks for your help Nan
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