"Gap Insurance" on new car - would you buy it?

Depends. Do you intend to wreck it?

Certainly not!

BTW, I could sweared I selectedd the dollar sign, not the sperm icon!!

I didn't put much down on my last car, so I bought it. Seemed to make the finance guy happy.

Hope you and your car are happy together.

Don't buy gap from the dealer,don't finance with the dealer..

DON'T buy a used SAAB..

I sell cars for a large Toyota Dealer in florida,
So Listen to me now or hear me later..

ok.

Why not?

I tried to get gap insurance from State Farm and they wouldn't sell it to me.

I bought an 09 Yaris and if it gets totaled, I'm out the difference.

nope, its a scam. The only time you need it is if youre way overpaying.

Last Edited by Douggie on 04/20/2009 11:16 PM

depends on what the gap is.

My parents got it on their last new car, and it was wrecked in a week.. they were super lucky to not only have lived thru someone broadsiding them, but also in that it cost them nothing for the car or setting up it's replacement.

I've got "replacement insurance" - if it becomes a complete total within the 3 years, then I get a brand new at whatever the note is at that time.

However, I don't know if my vehicle will be made again after this year.

I think it depends. If you have financed quite a bit of negative equity, then it might be worth it.

That's not true regarding buying a new car. No one other than employees of the new car lot get a decent enough deal. The employee price is (at Toyota in Glen Burnie anyway) $500.00 over actual dealer cost.

Thats the employee price, so figure if you are a non employee..

A friend of mine bought a used car for her daughter. She purchased the GAP insurance. One week later her daughter was in a wreck and totaled the car AND the two other cars involved. No one was hurt but if my friend hadn't purchased the GAP insurance she would have had to pay off the difference in the loan amount and the value of the car.

It depends on your circumstance. She purchased a car for $10,000.00 and it was only valued at $8,000.00 after the accident. Without GAP insurance, she would have had to come with the balance of the loan, or $2,000.00.

She's not real smart financially and refused to let her daughter PRACTICE drive in her new Toyota.

Actually, when she told me the story I had never heard of GAP insurance.

Your full coverage car insurance will cover the gap.
The dealer needs you to buy gap to get your car loan
bought by a lender,and of course that's a money maker for the dealership as well.

Be sure to get a car fax from the dealer on any car your thinking of buying,they should give it to you free,if not walk!!

If you buy a 2007 Saab and keep it 3 years,which is average
you'll have a 5 year old car with no trade or resale value.

I took in a 3 year old Forester turbo with 38k miles on it
2 weeks ago 4500 trade value on a car that cost 20k in 06.

Do your self a A Favor and buy a Honda or a Toyota,finance through your bank or credit union,get full coverage insurance,what ever the sticker price is on the car you
want take 3500 off of that price and don't go any higher.

Listen up folks...i am a finance manager in a chevrolet dealership...we get at least 4 or 5 claims a week (i work in a large metropolitan area). Gap is SOOO important for anyone financing more than 80 percent of the current value on the car. I purchase it on all my vehicles and i have seen it work for too many people. Insurance companies dont care what your payoff is they only care what the car is worth.

I make 15% of backend Gross,I think everyone
should buy GAP as well..

How about life insurance to payoff your car loan
in case you die??

yeah new cars are different. You lose 20% value driving it off the lot.

HEY - UPDATE, i raan the topic by my insurance carrier AND the manager at my credit union (whom I've known for about 8 years). We're getting gap ins. with them for less than 1/2 the cost it would have been through JPMorgan Chase. We are a little upside down to start with, but we're both really happy. We let them take an old out of commission mercedes in trade. that in itself was a huge relief. was so sick of repairing that car and the crappy work our mechanic did on it. they handled transferring the title, etc. THey came and picked it up. So i didn't have to do the whole sell-a-car-on-craigslist nightmare. also ran the Carfax. No problems at all. It had been someone's lease for 2 years. The interior is immaculate.

Thanks for all the responses - it really helped me as I looked for confirmation. you guys are awesome!!

Not sure if you and your Saab are in the UK, however Finance gap is great at the beginning of ownership ....but diminishes in its value to you as the months roll on. i.e your outstanding loan will be getting smaller ...so the payout in the event of a total loss will be getting smaller.

The Policy I would suggest for a used car that's new to you, ie your Saab, would be an RTI gap policy. (Return to Invoice). Whether you have bought the car from a dealer or privately, if the car gets totalled you will recieve the difference between the market value at time of loss (Insurers settlement), and the original invoice/value at policy inception. ...its this policy that becomes more valuable as the months and years roll-on as the car becomes worth less and less. RTI Gap is available for 1-4 years.

I bought mine here in the uk from click4gap.co.uk they are not a broker and have fantastic customer service.

You can call them on 0044 (0)208 543 6014 or from the UK on 0844 357 8300

Hope the above helps you!

The pro's to Gap Insurance is that you can be considerably upside down, many thousands of dollars, on a newer car that is heavily financed if it gets totaled in a wreck early in your ownership experience.

The REAL solution is of course to buy a clean used car with CASH, no financing involved. Modern cars last so much longer than older cars that ones with moderate milage (say 60,000 miles) can be picked at at 25%-35% of the cost of a new one. IMO let someone else have the new car smell (which they say is bad for you) and the heavy depreciation that comes with buying a new car.

I have always bought used and never financed. My vehicles look good and maintenance has been virtually non-existent except for the standard items. My "Cost Per Mile" to drive them (not including the gas/oil consumables but including repairs tires etc.) is about 1/4 to 1/6 of what the previous owners who were suffering high depreciation and paying finance charges were paying. For me that adds up to many thousands of dollars PER YEAR that I am saving.

GAP insurance on a financed vehicle is a GOOD thing to have.
The bad thing is the price/way the dealer sells it to you for... An average GAP policy in GA really costs around $200-300. But guess what's he price the dealer sells it to the average Joe?? 400? 500? 600? 1000? Nope, the answer is as high the dealer can rip you off with. These people aren't regulated by the State's Ins. Dept. so they do horrible things... People sometimes get GAP and they dont even know if the company they got it thru even exists...

GAP insurance is available as an option on your auto policy.

It is a relatively cheap endorsement.

Or the insurance company rips you off and you are a few grand upside-down. It does work.

It is a $20 endorsement to an auto policy. I have no idea why anyone would consider buying insurance for hundreds of dollars from a dealership.

because it's financed into the cost of the vehicle.

Here is a ton of information about GAP insurance - the pros and cons:

[link to www.leasemorecarforlessmoney.com (secure)]

If you're buying a new car with very little money down you should have GAP. Especially if you owed on your last car and you rolled it into your new financing deal.

If your car gets wrecked and you owe more than it's worth that can be a potentially catastrophic thing financially.

Yes especially if you have negative equity or you are not putting 1/3 of the value as a down payment.

New cars depreciate rapidly.

All new car purchasers are "upside down" - meaning they owe more than it's worth when they leave the lot.

If the car RT's in a wreck you will owe thousands on the loan still.

Gap pays your insurance deductible for you and pays off the loan in full.

You should be able to add it for around 300 to the loan which will change your monthly payment by about 5 dollars a month.

Add gap.

- qualifications- 15 years in the auto industry serving in upper management.

It's the only product all of us in the car business buy 100% of the time.

This won't pay your deductible and only covers a small set percentage.

Gap from a dealer pays up to 150% of the value of the vehicle.

The last time I saw a Saab on the street was 1976 and it was a 3 cylinder, 2 stroke (chain saw type)engine. It required oil to be added to the gasoline at fill-up time!
Yeah, great car!

No. Unless you were crazy enough to seriously overpay for a 10 year old car...