by Guest » Wed Jul 18, 2007 08:38 am
Hi friends, I am going to have my first car. Some of my friends have suggested that I should also consider buying Gap insurance along with the auto insurance. I am very much confused. Can anybody tell me what Gap insurance is? and why should I purchase one? Thanks you in advance for any suggestion. Timothy
Posted: Wed Jul 18, 2007 09:40 am Post Subject:
Hi Timothy, wish you all the luck on your first car. Your friends have suggested you rightly. Gap insurance bridges the gap between the actual value of the vehicle and the coverage the insurance company is offering on it. Gap insurance comes into the picture when the insurance coverage is falling short of what you still owe to the lender. Gap insurance normally covers damages due to accident and theft. At times, auto insurances come with in-build gap insurances. Therefore, check it out with the insurance provider before looking for it outside. If they are not offering it, you can very well buy it from the dealer.
Hope this information will help you to some extent.
Best of luck!
Juanita
Posted: Wed Jul 18, 2007 10:03 am Post Subject:
Hi, Gap insurance is not mandatory like liability insurance. But it is a wise deal to have gap insurance on your new car. Normally, your car value depreciates the moment you roll it out of the showroom. Hence, if you wreck your car in an accident after few months, your insurance company will only pay the market value of the car and not the actual price. And for the new car the loss is likely to exceed the amount of compensation. Gap insurance will help in meeting this difference.
Posted: Wed Jul 18, 2007 10:24 am Post Subject: regarding gap insurance
Gap insurance acts as a hedge against the fast depreciation of the new vehicles. Even if you have full coverage on the brand new car you may still consider obtaining gap insurance. You can purchase one at a reasonable price from the market. But, try to avoid buying it from the dealers because they usually charge high premium. You don't have to carry gap insurance on your car for lifelong. You can normally drop it after two years or so.
Regards,
Samantha
Posted: Tue Jul 24, 2007 08:44 am Post Subject: GAP Insurance
fatman, juanita and samatha
I have read your comments above, which are quite interesting. I would like to know more about this. what is average rate for this additional cover. what underwriters are competitive and etc.
I believe that this cover would work well with other properties such as ship as well. The ship prices are up and down, and shipowners usually borrow money from banks to buy their ships. If something happen to the ship before the long term loan end, shipowner has to pay back the remaining loan to the bank. The gap would be serious problem to them if the hull insurance pays actual cash value or current price.
Would you please advise me of a good website or source to get more information about this if you have any ?
byo
Posted: Wed Sep 12, 2007 11:27 am Post Subject:
It is my understanding (all I have had any experience with) that the GAP policies are sold thru the leinholder. Kind of like credit life on debts. When you select your leinholder, ask them if they offer (thru a third party likely) GAP insurance on your loan.
Posted: Fri Oct 12, 2007 11:43 pm Post Subject:
We purchased GAP coverage from a GM dealership when we purchased our new $30K SUV. The cost was an additional $600 added to what we financed the vehicle for.
Wife was involved in accident, (won't go into a ton of detail) but GAP insurance doesn't do a thing for you when your vehicle won't "total out". It only pays in total loss situations due to theft fire accident etc.
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