Buying GAP insurance?

[dreamin_disney]

Hello. Dh finally got rid of his 1995 sliverado extented cab truck(gas hog). The air went out in it 1-2 years ago. Plus at anytime i'm sure it would need some repairs. He traded it in with the cash for clunkers $4500.
He got a charcol grey 2010 toyota corolla S.

anyways the dealer tried selling us Gap insurance for $500 and said he had to charge $100 per year (the loan is 2.9% for 5 years). Then after he realize we werent budging he said $400 then $350. We told him MIL got a 2010 toyota corolla le same cost of our corrolla S for $250(GAP) then he said it must be a different type of GAp. I didnt feel comofrtable with him. Plus my credit union sold me Gap for $150 for my 2007 camry and warned me the dealer would charge $600 and it the same thing. But when i bought my car i financed with the credit unuion but dh fian with tyoyota so not sure if we can get the Gap through credit union. Incase we cant where can we buy Gap insur?

thanks inadvance

 

[CowboyCO]

Call your insurance agent and get Gap added to your auto policy. It cost me about $4 a month. And when you don't need it anymore, you can drop the coverage.

 

[bumbershoot]

I have gap insurance on our car, and we'll keep it until what we owe matches what the car is worth.

We got it through our car insurance; with Allstate, it's included with their Gold package/plan. It's maybe a couple dollars/month. That's it. And with the Gold plan, you get accident forgiveness for at least one accident (trying to remember if the guy said Gold was multiple, or if Platinum was multiple...hmm).

 

[denisegold]

If you have AAA, call them- they have very cheap GAP insurance, and again, you drop it when you don't need it (when you have paid enough on the car to equal the blue book value). The dealerships, for some reason, always try this with every new car buyer, and it's a rip off (but they "build it into your loan" so it seems like you are paying a few dollars a month- but you don't need gap insurance for the life of the loan!! I hate how car dealerships assume we are stupid (esp. if you are a woman).

 

[denisegold]

If you have AAA, call them- they have very cheap GAP insurance, and again, you drop it when you don't need it (when you have paid enough on the car to equal the blue book value). The dealerships, for some reason, always try this with every new car buyer, and it's a rip off (but they "build it into your loan" so it seems like you are paying a few dollars a month- but you don't need gap insurance for the life of the loan!! I hate how car dealerships assume we are stupid (esp. if you are a woman).

Opps- I forgot to add, we have our car insurance through AAA, so I guess you would have to, too (but they are a great deal- all kinds of extra discounts) but like the other poster above me said, she gets it through AllState (her insurance) so I guess the point is, just get it through your car insurance, NOT the car dealer.

 

[fakereadhed]

Just switched to Progressive for auto and they offered GAP for $8/mo for us. We switched to them, added a teen driver , and got GAP for two of the three cars for the same price we were paying for Farmers for two cars w/out GAP.

 

[mamalle]

mine is $8.00 per month for Gap thru our car loan. I really dont see much difference if I was to switch to state farm..

 

[Golf4food]

What you get through your primary ins company is not GAP, it is a clause to pay the full amount of your loan in case of a total loss. Similar function but different. Generally your primary will only pay their assessed value and leave you footing the bill for any difference. GAP covers that difference in those cases and is, in most states, a debt cancellation waiver product and not insurance at all and must be financed into the loan contract at the time of sale (you can't buy GAP after you've closed the deal a week later, for example). Most primary insurance carriers now offer the similar (but different) program where they charge you more for your primary coverage and agree to pay your full loan amount instead of just the assessed value.

If your loan is upside down and likely will be for a while, GAP is a good idea. Average GAP claims run around $3,000 but depending on the program there might not be a limit or a limit of X% of the MSRP value at time of purchase and I've seen GAP payouts in the $25,000 range. Crazy stuff that people are that upside down on loans. We wonder why our banking industry is in such a mess now!

If you used the clunker program and put any money down you might not be upside down and might not need it. Even at $500 over a five year loan it is only roughly $8.33 per month, which is about the same that some people are saying their primary insurer charges them, so not much difference there, and probably worth the peace of mind if you can't afford to pay the difference out of pocket if you do suffer a total loss.

 

[mamalle]

I look at the 8.00 per month as piece of mind if it does get stolen and wrecked or in a car wreck. My van when we had it depreciated when we took it off the lot so it was worth it to me.. dh doesnt have it on his GMC as its value has always been more than what he owed..

 

[BrettS]

mine is $8.00 per month for Gap thru our car loan. I really dont see much difference if I was to switch to state farm..

The difference is that if you purchased it through the dealer and it added $8 per month to your car loan, then you'll be paying that through the life of your loan. For example, if you have a 5 year loan you'll pay a total of $480.

Instead, if you had it through an insurance policy then you could cancel it when the value of your loan dropped below the value of your car. If it was $8 per month through your insurance company, but you only needed it for 2.5 years, then you'd only pay $240 to the insurance company.

On the other hand, if your gap insurance wasn't purchased outright and financed into your car loan, but instead is a product offered by your loan company that you can cancel at any time, then you're right... In that case it doesn't really matter if you're getting it through your finance company or your insurance company. As long as the cost is similar then in the end you'll pay about the same amount.

 

[bumbershoot]

The difference is that if you purchased it through the dealer and it added $8 per month to your car loan, then you'll be paying that through the life of your loan. For example, if you have a 5 year loan you'll pay a total of $480.

And possibly with interest on it!

 

[Trish Bessette]

Call a State Farm Insurance agent and refinance your car loan through the State Farm Bank - FREE GAP INSURANCE!!!!

 

[stitchlovestink]

If your loan is upside down and likely will be for a while, GAP is a good idea. Average GAP claims run around $3,000 but depending on the program there might not be a limit or a limit of X% of the MSRP value at time of purchase and I've seen GAP payouts in the $25,000 range. Crazy stuff that people are that upside down on loans. We wonder why our banking industry is in such a mess now!

while I do agree that the banking industry is a mess now, I can understand why some people are upside down on a vehicle loan and reasonably so. First off, if you buy a brand new car (which I just did ) as soon as you drive it off of the lot it's depreciated anywhere from 20 to 30% because it is now a 'used' car. And then if you don't have a whole lot to put down on it, your financed amount is going to be higher. Then say someone hits your 'brand new car' and totals it. I realize that this is a rarity, but IT DOES HAPPEN. Esp, if the frame gets bent. And now in MD, the law requires the ins co to total out a vehicle if the repair bill exceeds 75% of the value of the car. The ins co doesn't have a choice. And what if the person who hit you has MAIF (MD auto ins fund) and only has minimal requirements (like 20k). Yeah, you can sue them, but do you really think you're going to get blood from a turnip? If they have minimal coverage, it probably (not always) because they don't have anything that they really need to protect from being taken away. So people who have had a bad run of events can end up upside down for a legitimate reason in my book (at least)
OP, we got our gap coverage thru the credit union who financed our loan. It was $190 for the life of the loan and after the policy paid off the balance of the loan, they gave you $1,000 towards your replacement vehicle. I didn't think that this was a bad deal. I have been hit by 2 other drivers within 3 miles of my home w/in the last 3 years. This 2nd time they totaled my vehicle. You never know what might happen. I do think that GAP ins is a good idea in this economy beause none of us really know how vehicle prices/values could be affected in the future.
Good Luck w/ your decision.

 

[P.I. Squirrel]

anyways the dealer tried selling us Gap insurance for $500 and said he had to charge $100 per year (the loan is 2.9% for 5 years). Then after he realize we werent budging he said $400 then $350. We told him MIL got a 2010 toyota corolla le same cost of our corrolla S for $250(GAP) then he said it must be a different type of GAp.

I noticed three dealer tricks here:

1. The dealer says you are required to buy GAP for the whole term of the loan, even though, as others have said, you only need it until your loan payoff/value is equal.
2. Dealer markup is well over 100%. He will offer you lower and lower prices, but will still make a profit.
3. Even though the dealer is a reseller of someone else's GAP, he will try to convince you that only his product is the right one to get. All others are inferior products, in his opinion, no matter where you get it from.

I agree with the others. Add it to your insurance coverage.