Gap insurance?

[heartsy77]

We are looking at refinancing our car loan and would like gap insurance. We have it on other vehicle but for some reason it was offered at the dealership when we purchased the car. I have heard you can by independently. Anybody have a company they have bought gap insurance through?

 

[2Monkeys]

We have gap insurance on both cars, but purchased at the time we purchased the cars. I think it was around $500 extra. We were told if we didn't get it at that time, we would not be able to get it at all. Not sure if that is still true, since it has been several years, but that was our experience.

 

[CyndiLooWho]

When I was getting rate quotes on new cars from State Farm, they told me to decline gap ins from the dealer and get it from them cheaper. But we put down 30-40% on each of the cars, so we declined any kind of gap ins.

So my advice is to call your car ins agent and see what s/he has to say.

 

[kittychatalot]

I worked for one auto insurance company and they offered it for 2% of the comp and collision rates so it was like $20 per year. Also, you only need this if you are upside down on the vehicle. If you borrowed more than it is worth at any given point. Might not need it based on your specific situation.

 

[ZachnElli]

If you finance your vehicle with State Farm Bank, it's built into the loan. It doesn't cost anything!

 

[disneymom2003]

I have never heard of gap insurance. What exactly is it?

 

[PrincessSuzanne]

I have never heard of gap insurance. What exactly is it?

It covers the "gap" between what you owe and what the car is worth if you are in an accident. Say you owe $5000 on the car and the insurance company says it is only worth $3000, then the Gap insurance will pick up the rest ($2000) so that you aren't responsible for paying it out of pocket.

I got it when I bought my last car, but ended up paying it off after just over a year, so GMAC refunded me most of what I paid.

Suzanne

 

[Inigo]

Talk to your auto insurance agency about getting gap coverage as part of your auto insurance. It's much, much cheaper, usually, to get it through your auto insurance than to buy a separate policy through the dealer or through the bank.

I think gap coverage through American Family insurance was something like $20 every six months

 

[Lisa_M]

I worked for one auto insurance company and they offered it for 2% of the comp and collision rates so it was like $20 per year. Also, you only need this if you are upside down on the vehicle. If you borrowed more than it is worth at any given point. Might not need it based on your specific situation.

We weren't upside down when we bought our van, but we got gap insurance just in case. We know that Chrysler's depreciate rather quickly, so I wanted to be covered in the event we were. Ours was $210 that covers the life of the loan through the credit union we financed through. I thought it was cheap, but I see others have gotten it cheaper.

 

[heartsy77]

If you finance your vehicle with State Farm Bank, it's built into the loan. It doesn't cost anything!

That is the bank who wants to refinance our car; we have had SF insurance for over 15 years. My problem is they want to raise our interest rate 2 points from our current loan, which raises our payment about 15 a month. Although we would shave a year off our loan. I have applied at our credit union and the rate would be 7 points lower in interest, hence while i am looking for an independent gap insurance. I am not sure why SF wants to raise our interest rate we have good solid credit, at least 720 ? So if we went throught the cu we would decrease are payment $40 a month and shave a year, but no gap.

 

[Golf4food]

GapInsurance is, in most states, a debt cancellation product and can only be attached to a finance contract at time of sale by the acting lender (a car dealership acts as lender while setting everything up at time of sale). If you refinance with a credit union many of them sell GAP and can add coverage to the refinanced loan if their GAP provider allows coverage on refis.

The coverage you get as a rider on your auto insurance is not technically GAP but functions similarly. Our insurance provider has that coverage and we added it to our new SUV last year instead of GAP. That type of coverage results in your insurance company paying off the full loan instead of merely what the vehicle was worth at time of loss so there is no GAP left over.

If you have any other questions feel free to PM me.

 

[TifffanyD]

Another advantage to buying it through your auto insurance is that you can cancel it at any time (if you sell the car or pay it off early). Whereas through the dealer it's a fixed price built into the financing

 

[girli565]

I refinanced through my credit union and got Gap added to the loan for $199 for the life of the loan. It was a great deal, because I refinanced 6 months after I bought my car and pretty much owed the entire loan still, just got a great interest rate.