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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: wlbrown9 (Oct 02, 2008 7:53 am) |
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Replying to: fandiguy (Oct 02, 2008 6:57 am) After the loan is paid off why can't someone just call their insurance company and tell them to cancel the GAP insurance?  When I bought my car a year ago the finance manager tacked on GAP insurance for an additional $599. I went home and discovered that my car insurance company offered it for $6/mo. I went back the next business day and canceled the dealership's coverage.
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Replying to: tedebear (Oct 02, 2008 1:33 pm) $599 is what the dealer charged, $6 a month is what your insurance charged.....for how many months. Gotta compare apples to apples. Did the insurance company offer to waive the deductible if you ever used it? The coverage varies from company to company (dealership and insurance provider) so its hard to tell which is the better deal sometimes. |
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Replying to: fandiguy (Oct 02, 2008 2:01 pm) You charge $599 for GAP insurance (which is useless the last year and half of a 60 month loan) and add it to the monthly car payment so they are paying it the entire length of the loan. So the actually cost of the GAP insurance is $599 plus the interest rate over the length of the loan. And of course you can't cancel it or people simply forget it's there. At least with your insurance company, you can cancel it at anytime, like the last two years of the loan when equity of the car may be greater than the amount owed (of course this depends on the car, loan amount, interest rate, down payment, etc). Quite honestly, if your insurance company offers GAP insurance, it is a much better bargain than what the dealership offers. GAP insurance is like extended warranties, it's for people who are looking for peace of mind. Nothing something I would ever buy but I can understand why people buy it. |
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Replying to: dtownfb (Oct 02, 2008 5:15 pm) You charge $599 for GAP insurance (which is useless the last year and half of a 60 month loan) and add it to the monthly car payment so they are paying it the entire length of the loan. So the actually cost of the GAP insurance is $599 plus the interest rate over the length of the loan There is no way to determine the value of a car 4 1/2 years out, so thats an assumption on your part. It never ceases to amaze me how many people are obsessed with the tiny interest charges on this amount of money. "I'll put it into a high-yield cd, etc, etc, etc." I'm so glad everyone has a plan to become millionaires by investing the charge of extended warranties and GAP policies, because interest on that amount of money is HUGE!!! And of course you can't cancel it or people simply forget it's there What?!?! I think i know what you were trying to say. You can go to the dealership at anytime and cancel GAP. Did you read the original post i was responding to when the poster said he cancelled the GAP policy he purchased at the dealership? Quite honestly, if your insurance company offers GAP insurance, it is a much better bargain than what the dealership offers. GAP insurance is like extended warranties, it's for people who are looking for peace of mind. Nothing something I would ever buy but I can understand why people buy it. The value would depend on the cost and coverage levels. If i sell you GAP for $200, now the dealerships GAP is a better value then the insurance companies-everythings not so black and white, there's a gray area. You're entitled to your opinion, but if you finance a car with no money down or trade equity, GAP is a no-brainer. Even a biased site like edmunds will usually agree with that. Just like with warranty's, if someone who doesn't have GAP totals a car and the insurance company won't pay off the loan, now they're the "evil insurance company."
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Replying to: fandiguy (Oct 03, 2008 5:30 am) When did I mention anything about high yield cd, etc., etc. etc.? My opinion is based on where I've read that most cars reach their equilibrium about month 42-44 in a 60 month loan. Since you are an F&I guy, you should be able to confirm or deny this, instead of stating that "there is no way to determine....." Also GAP insurance kicks in when a car is totaled. I've been fortunate to not have had such a devestating event nor have I had a moving violation in over 25 years. The value would depend on the cost and coverage levels. If i sell you GAP for $200, now the dealerships GAP is a better value then the insurance companies-everythings not so black and white, there's a gray area.<i/> So now you sell GAP insurance for $200???? $200 would be a great price for GAP insurance. I've never heard of a dealer going that low. Most of the time it's "it will only be an additional $xx a month". I agree that everyone should consider it if you do a no money down loan or a buy a car that depreciates quickly. My point is simple, from my experience, GAP insurance bought through a dealership is over-priced. If you feel the need to have it (personal choice), check with your own insurance company first. Like the previous poster mentioned most insurance companies charge around $6/month although I have seen cheaper. Your GAP insurance at $599 on a 60 month loan would be a minimum of $10/month not including interest. Basically, I am a cheap person (it's my engineering background). I would rather not pay extra for something that I may or may not need. if I do make the decision to buy something like this, I will definitely pay as little as possible. |
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You're right that I should not have made such a general statement. But idiotic is a bit much....but I will stop there. I've read enough and have had enough personal experience that I am pretty comfortable stating that buying GAP insurance through the dealership will be your most expensive option unless you can negotiate the price (you haven't indicated you can do this...). Why would a dealership care whether or not you can pay for your car loan after the car has been totaled, unless they could benefit from it financially? I don't mind people making a profit but don't get offended if people think the product you supply is a bit over priced and suggest checking other options. That's all I am arguing! fandiguy: we differ on this issue and that is fine but please keep the insults to yourself. I've been a member of Edmunds since the mid 90s and have been a very active participant in these forums. I try to offer my opinion on various topics without insulting people or name calling. I like a good argument or debate but always try to be fair and remember to treat people respectfully. I also try not to use terms like "idiotic". |
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Replying to: dtownfb (Oct 02, 2008 5:15 pm) They have a Platinum Package that adds Safe Driving Bonus where you get 5% of your premium back if you do not have an accident for 6 months. Comparing that it would have cost me $15 more every six months EVEN if I got the 5% back. The Accident Forgivenss package noted for multiple accidents where the Gold Package was probably non-multiple. I'm comfortable with this and in my situation I decided this worked out best. Bill
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Replying to: wlbrown9 (Oct 06, 2008 1:49 pm) |
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