Hi, are you aware that the worth of your new car may depreciate by 20-30% as soon as it goes on road?
Over here the purchase price of your new vehicle could play an important role. More is the purchase price, more would be the fall in value.
This would get you a lot lesser in terms of its fair market value in case you meet with an accident soon after your purchase and seek a compensation from the insurance carrier. Pinkfloydfan
Posted: Wed Sep 09, 2009 11:59 am Post Subject:
EXTREMELY important if you are upside down. If you owe more than the vehicles ACV (actual cash value)..you need GAP. If you put a significant amount down then you are likely not upside down. Check your vehicles value, on NADA, or Edmunds. (NOT Kelly blue book)...See where you are in terms of value vs loan balance.
Posted: Thu Sep 10, 2009 11:17 am Post Subject:
Hi, you'll not get gap insurance from all companies. You may check out with a number of options like gap insurance state farm .
If you'd apply with your current insurance provider, they'd cover you for the gap between the actual fair market worth of your car and your car loan. Steven
Posted: Thu Sep 10, 2009 06:02 pm Post Subject:
Well, on a personal note, I've told my kids "If you have to put GAP coverage on a car, you are not financially ready to purchase the car". I've always looked at GAP coverage as just another added expense that increases the total amount paid for the car. With a sufficient down payment on the car, the coverage isn't necessary, therefore, reducing the overall cost of the car. To me, it is a good financial practice to pay the least amount possible for a product.
However, some people get in situations where a down payment is not possible or they are willing to pay whatever price they have to get the car they want, now. In that case, if the individual doesn't have the cash to put a sufficient down payment on the car, they most likely also don't have the cash to pay the loan off in the event the car is totaled either. In that scenario, I would recommend GAP insurance.
Dealers will typically offer the coverage, but at a much higher price than most insurers will. So I would always recommend contacting your insurance agent for a quote prior to purchasing it from the dealer.
As said in a previous post, yes, not all insurers offer it. However, it has become more popular over the years, so it shouldn't be too difficult to find one that does.
In also recommend to get a full explanation of how the coverage applies. Don’t just assume it will pay off the loan amount. For instance, I have seen several insurers limit the coverage to not exceed a payout of over 25% of the ACV (actual cash value) amount at the time of loss.
Posted: Thu Sep 10, 2009 11:18 pm Post Subject:
"If you have to put GAP coverage on a car, you are not financially ready to purchase the car".
I couldn't agree more...but, that being said, there are tons of people out there that live beyond their means daily. And there are plenty of car dealers, and lenders willing to help them dig that hole deeper and deeper. :x With GAP, at least in the event of a total loss, they aren't rolling the balance on top of the next car they buy..
I have seen several insurers limit the coverage to not exceed a payout of over 25% of the ACV (actual cash value) amount at the time of loss
GREAT point AnMarie, and one I think we've failed to mention. I've (personally) not seen a GAP policy that doesn't have a percentage in it. The company I work for has the 25% also.
Posted: Fri Sep 11, 2009 12:44 pm Post Subject:
You must note that gap insurance is available for your new cars or cars that have been used or refinanced. You could also avail it for your trucks or SUVs that have been purchased within the last 12 months. Remember that you don't require gap insurance for all new cars.
Posted: Fri Sep 11, 2009 03:33 pm Post Subject:
anonymous00, that is incorrect saying that gap coverage can be added to used or refinanced vehicles. Most insurance companies (at least in Pennsylvania) limit gap coverage to only vehicles up to a year or so old. If you try getting gap coverage put on a used vehicle, more than likely the insurance company will drop the gap coverage, or you'll be paying the money for the coverage for nothing.[/quote]
Posted: Fri Sep 11, 2009 10:01 pm Post Subject:
I don't know about refinanced vehicles. I do know that many carriers offer GAP for used vehicles, (including the carrier I work for :wink: )
Posted: Fri Sep 11, 2009 10:25 pm Post Subject:
We see both sides here in Texas.
For instance, Allstate requires the car to be less than 3 years old and hasn't been listed on the Allstate policy for more than a year. Refinanced or not wasn't an issue, but they do have a cap on the amount they'll pay out (unable to confirm that cap amount at this time).
I've seen another carrier (the one I used to work for) allow GAP on any vehicle they would allow physical damage on (physical damage - aka comprehensive and collision coverage or also commonly referred to as "full coverage"). That extended to vehicles up to 25 years old. Refinanced or not wasn't an issue.
On a side note though - can't say I ever saw anyone purchase GAP on a vehicle that old, but they would do it if requested :)
Again, I'm only referring to Texas.
Posted: Sat Sep 12, 2009 11:17 am Post Subject:
A majority of the dealerships would offer gap insurance to you while buying a new car, but you'd need to spend more for that. So, while you're gonna buy a new car, you should ideally check with your existing carrier and see if they have it for you.
Posted: Wed Sep 09, 2009 11:37 am Post Subject:
Hi, are you aware that the worth of your new car may depreciate by 20-30% as soon as it goes on road?
Over here the purchase price of your new vehicle could play an important role. More is the purchase price, more would be the fall in value.
This would get you a lot lesser in terms of its fair market value in case you meet with an accident soon after your purchase and seek a compensation from the insurance carrier. Pinkfloydfan
Posted: Wed Sep 09, 2009 11:59 am Post Subject:
EXTREMELY important if you are upside down. If you owe more than the vehicles ACV (actual cash value)..you need GAP. If you put a significant amount down then you are likely not upside down. Check your vehicles value, on NADA, or Edmunds. (NOT Kelly blue book)...See where you are in terms of value vs loan balance.
Posted: Thu Sep 10, 2009 11:17 am Post Subject:
Hi, you'll not get gap insurance from all companies. You may check out with a number of options like gap insurance state farm .
If you'd apply with your current insurance provider, they'd cover you for the gap between the actual fair market worth of your car and your car loan. Steven
Posted: Thu Sep 10, 2009 06:02 pm Post Subject:
Well, on a personal note, I've told my kids "If you have to put GAP coverage on a car, you are not financially ready to purchase the car". I've always looked at GAP coverage as just another added expense that increases the total amount paid for the car. With a sufficient down payment on the car, the coverage isn't necessary, therefore, reducing the overall cost of the car. To me, it is a good financial practice to pay the least amount possible for a product.
However, some people get in situations where a down payment is not possible or they are willing to pay whatever price they have to get the car they want, now. In that case, if the individual doesn't have the cash to put a sufficient down payment on the car, they most likely also don't have the cash to pay the loan off in the event the car is totaled either. In that scenario, I would recommend GAP insurance.
Dealers will typically offer the coverage, but at a much higher price than most insurers will. So I would always recommend contacting your insurance agent for a quote prior to purchasing it from the dealer.
As said in a previous post, yes, not all insurers offer it. However, it has become more popular over the years, so it shouldn't be too difficult to find one that does.
In also recommend to get a full explanation of how the coverage applies. Don’t just assume it will pay off the loan amount. For instance, I have seen several insurers limit the coverage to not exceed a payout of over 25% of the ACV (actual cash value) amount at the time of loss.
Posted: Thu Sep 10, 2009 11:18 pm Post Subject:
"If you have to put GAP coverage on a car, you are not financially ready to purchase the car".
I couldn't agree more...but, that being said, there are tons of people out there that live beyond their means daily. And there are plenty of car dealers, and lenders willing to help them dig that hole deeper and deeper. :x With GAP, at least in the event of a total loss, they aren't rolling the balance on top of the next car they buy..I have seen several insurers limit the coverage to not exceed a payout of over 25% of the ACV (actual cash value) amount at the time of loss
GREAT point AnMarie, and one I think we've failed to mention. I've (personally) not seen a GAP policy that doesn't have a percentage in it. The company I work for has the 25% also.Posted: Fri Sep 11, 2009 12:44 pm Post Subject:
You must note that gap insurance is available for your new cars or cars that have been used or refinanced. You could also avail it for your trucks or SUVs that have been purchased within the last 12 months. Remember that you don't require gap insurance for all new cars.
Posted: Fri Sep 11, 2009 03:33 pm Post Subject:
anonymous00, that is incorrect saying that gap coverage can be added to used or refinanced vehicles. Most insurance companies (at least in Pennsylvania) limit gap coverage to only vehicles up to a year or so old. If you try getting gap coverage put on a used vehicle, more than likely the insurance company will drop the gap coverage, or you'll be paying the money for the coverage for nothing.[/quote]
Posted: Fri Sep 11, 2009 10:01 pm Post Subject:
I don't know about refinanced vehicles. I do know that many carriers offer GAP for used vehicles, (including the carrier I work for :wink: )
Posted: Fri Sep 11, 2009 10:25 pm Post Subject:
We see both sides here in Texas.
For instance, Allstate requires the car to be less than 3 years old and hasn't been listed on the Allstate policy for more than a year. Refinanced or not wasn't an issue, but they do have a cap on the amount they'll pay out (unable to confirm that cap amount at this time).
I've seen another carrier (the one I used to work for) allow GAP on any vehicle they would allow physical damage on (physical damage - aka comprehensive and collision coverage or also commonly referred to as "full coverage"). That extended to vehicles up to 25 years old. Refinanced or not wasn't an issue.
On a side note though - can't say I ever saw anyone purchase GAP on a vehicle that old, but they would do it if requested :)
Again, I'm only referring to Texas.
Posted: Sat Sep 12, 2009 11:17 am Post Subject:
A majority of the dealerships would offer gap insurance to you while buying a new car, but you'd need to spend more for that. So, while you're gonna buy a new car, you should ideally check with your existing carrier and see if they have it for you.
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