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Unread 06-09-2009, 02:45 PM   #1
ChillyWillys
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GAP Insurance

For those of you planning to buy a new or used Jeep, GAP Insurance is something you should consider. If you don't know what it is, here's a "nut shell" explanation. It will cover the difference between what you've paid and what you owe on your Jeep if it's totaled in an accident. BUT BEWARE! You should first check with your local insurance carrier to see if you can get it cheaper through them than through your Chrysler/Jeep dealer. I didn't know about GAP and went through the dealer. I found out about a week after I bought mine that I could get it much cheaper through my local insurance agent. The problem has been trying to get it cancelled at the Jeep end of things. It's been almost 60 days since I bought mine (and that's the time you're allowed to get GAP cancelled) and it still isn't done yet. But I am getting closer. To put it nicely, the whole experience has been a commedy of errors. It would have been far easier to push free flowing water up hill!! It's been aggravating with a capital "A"!

Just thought I'd offer this friendly "community service" advice.


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Unread 06-09-2009, 02:56 PM   #2
Grewe02
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I bank with a Credit Union, and GAP insurance is provided free on all of my auto loans

And, it has saved my *** twice so far.
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Unread 06-12-2009, 05:42 PM   #3
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USAA offers the gap insurance on their loans. Last time, i think it was $199 (loan was about 9700)

Depending on the value of the vehicle, vs value of the loan, its usually worth the investment.
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Unread 06-12-2009, 06:14 PM   #4
Me007gold
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any one who finances a car and dose not get GAP is a moron. I pay a few extra bucks a month on my insurance for "loan payoff" which is the same thing. Its totally worth the extra bucks, especially with the way people drive
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Unread 06-12-2009, 06:18 PM   #5
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Gap insurance is only useful if you don't put a large down-payment on your car. I got Gap through my credit union for my first MINI Cooper. It got smashed and totalled. I thought my insurance would kick in and pay off my loan, then I would be handed a check for the full value of my car by my car insurance company. I thought wrong. That $500 I paid for gap was useless because I owed less on the car than it was worth.

Same with my new one. Cost me $18,000, but I only finance $10,000.
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Unread 06-12-2009, 07:26 PM   #6
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We made the mistake 2 years ago to roll two cars with negative equity into one "new" car. A chevy equinox. Being dumb, nieve, and under pressure, we signed on a deal with a chevy dealership to buy a equinox for $38k. Our payments are $720 a month, but we did buy the GAP insurance incase the car gets totalled. To date we owe $33k on it, and I think it appraises for $16-18k. lol....I cant wait for hurricane season this year.
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Unread 06-12-2009, 07:40 PM   #7
madrabbitt
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Right. Gap insurance is pointless if the financed amount will always be less then the vehicle is worth.

Case in point.

We bought an 05 escape.
Vehicle was worth 12k
Financed it for 9.7k over 4 years.
Will probably pay it off in 2-3 years, so the principal on the loan will always be much less then the vehicle's insured value.

Therefore we didnt get the gap insurance.

We figured it out on the WJ, worth 7k, financed 5k, we'll have the 3 year loan paid off in less then 2.
The gap insurance there was a waste of $200.
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Unread 06-15-2009, 12:55 PM   #8
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None of the above situations applied to us. We were given a 2 year or 19,000 mile warranty on it (the balance of the original warranty). So to us it made sense to get it. I should also add that through our local insurance agent we're paying $32.00 a year during the 4 year loan. That's a whole lot less than the $600 we would have paid through the dealer. That number times 4 is also less than half of one of the loan paynemts. That pretty much made it a "no brainer".

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Unread 06-15-2009, 01:53 PM   #9
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Quote:
Originally Posted by Niceface View Post
We made the mistake 2 years ago to roll two cars with negative equity into one "new" car. A chevy equinox. Being dumb, nieve, and under pressure, we signed on a deal with a chevy dealership to buy a equinox for $38k. Our payments are $720 a month, but we did buy the GAP insurance incase the car gets totalled. To date we owe $33k on it, and I think it appraises for $16-18k. lol....I cant wait for hurricane season this year.
GAP will not cover any portion of your loan from a trade-in that was upside down. I had a co-worker that rolled in 6k from a previous loan in his new car and it was not covered when his car got totalled.
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Unread 06-15-2009, 02:08 PM   #10
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Originally Posted by 1995_4.5L Jeep View Post
GAP will not cover any portion of your loan from a trade-in that was upside down. I had a co-worker that rolled in 6k from a previous loan in his new car and it was not covered when his car got totalled.
Your friend got a bad deal then. That is the purpose of GAP insurance. To cover a vehicles balance in the event of a total loss.
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Unread 06-15-2009, 02:11 PM   #11
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Your friend got a bad deal then. That is the purpose of GAP insurance. To cover a vehicles balance in the event of a total loss.
GAP does cover the difference between your loan ammount and vehicle value, but if you roll a balance from a previous loan, it will not be covered.
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Unread 06-15-2009, 02:21 PM   #12
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The GAP coverage is a seperate company from the dealership you buy the vehicle from. They don't know anything about your vehicle other than make/model, and what you owe on it. They do not know you rolled in a vehicle. Make sense?

I bought my vehicle from Champion Chevy, it's financed thru GMAC, and the GAP coverage is thru another person, and the extended warranty (if we had purchased it) would be thru another company.

All the GAP insurance provider knows is what the odometer reading is at the time it's totalled, how much is owed, and what the insurance is paying off. GAP picks up the rest. Period.
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Unread 06-15-2009, 02:53 PM   #13
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Quote:
Originally Posted by 1995_4.5L Jeep View Post
GAP does cover the difference between your loan ammount and vehicle value, but if you roll a balance from a previous loan, it will not be covered.
that doesnt make any sense


if you have 5k of an old vehicle, and you roll it over into a new one... the dealer is paying off your trade, and taking that 5k and adding it to the price of the new loan.. therefore youre paying 5k more for a new vehicle


thats a NEW loan.... so if something happens to that vehicle, its covered for the depreciated difference.
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Unread 06-15-2009, 04:03 PM   #14
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I understand the point you are making, so tell me if this makes sence. You buy a vehicle for $30k and roll in $5k from a previous loan. Now you have totalled the vehicle and you still owe $33k on a vehicle the MSRP was only $30k.

I got this from www.carinsurance.com : A GAP claim settlement may not cover the entire gap due, when your loan's Original Amount Financed exceeds 120% of MSRP (new vehicle) or NADA Retail Value (used vehicles), plus 30% of Value allowable for Additional Financed Items like Credit Life or Service Contracts.

So it is possible to get the balance of an old loan covered to a point.
http://www.carinsurance.com/kb/content10049.aspx
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Unread 06-15-2009, 06:53 PM   #15
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Quote:
Originally Posted by 1995_4.5L Jeep View Post
I understand the point you are making, so tell me if this makes sence. You buy a vehicle for $30k and roll in $5k from a previous loan. Now you have totalled the vehicle and you still owe $33k on a vehicle the MSRP was only $30k.

I got this from www.carinsurance.com : A GAP claim settlement may not cover the entire gap due, when your loan's Original Amount Financed exceeds 120% of MSRP (new vehicle) or NADA Retail Value (used vehicles), plus 30% of Value allowable for Additional Financed Items like Credit Life or Service Contracts.

So it is possible to get the balance of an old loan covered to a point.
http://www.carinsurance.com/kb/content10049.aspx
That is correct. It used to be that GAP would cover anything over the ACV (actual cash value) of the vehicle that the insurance company would not pay in the event of a total loss.

Now every GAP policy I've seen in the last couple years stop the amount for new vehicles at 120% of MSRP. And I saw this first hand last year, totaled my brand new GTI that had 3000 miles on it (not my fault) and owed more then 120% of MSRP (sticker not what you paid). This was because I saw the gas prices coming (Feb 08) and got rid of the crew cab 07 F-150 I was driving and was upside down in. I ended up having to pay 750$ to VW credit after GAP and my Insurance covered the rest.

The reason GAP coverage has changed in the last few years is the volatility of the car market, same reason why the mfg's have almost stopped leasing a vehicle because no one really knows how much a cars going to be worth in a year or two or three.
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