travste

I haven't bought a new car in a while and I am not sure if it is best to get gap insurance or not. Kevin or Bruce, how much is gap insurance roughly?

cyoda44

I would only buy gap if I was upside down in the car. That way it gets payed off if you wreck it and you don't have to pay the extra "upside down" money.

ecgirard2

I'm paying cash. Gap insurance would be a waste of money.

travste

excuse me for being naive, but if you buy a car for lets say 24,000....in a few weeks after buying the car, the car is not worth 24,000.....in that case is the car in a upside-down situation if is would get totalled.....is that the purpose of gap insurance? I ask because I am unsure of the whole purpose of it, but I know they ask it when you buy a new car.

Piston NV

I've been upside down, flew off a cliff and landed on the roof...it's NOOO fun, seatbelts save lives, but they also destroy shoulders...be safe

UGAKarl

Your insurance company usually has a better deal for the GAP insurance - so check there before you go to the dealer. Also it will only pay between the depreciated value and what you owe on the loan - don't get it if you're putting down more than 20% b/c that more than covers your depreciation in the first year. However, if GAP insurance is only $100 or $200 and you aren't putting much down it will probably be worth it for your peace of mind.

BlackRiderX

Are you accident prone? It's only a few hundred on a 25-30K purchase.


First c6 accident

legendlimetime

GAP insurance is to cover the difference of what your auto insurance gives you for your totalled car and what you actually owe a bank. When buying a new car often times your loan amount equals more than the car is really worth. Lots of people borrow 100% of the purchase price because they can. Then you add on negative equity from any trade-in they may have had plus sales tax which we know can be hundreds and maybe even a warranty and you can see how easy it is to get "upside down". GAP is only worthwhile if you are going to be in this situation. If you are putting enough money down or are trading-in a vehicle that you own or have enough equity in then GAP is not a good idea because if you happen to total your new car the check you get from your insurance company will pay what the car is really worth and your loan balance should be less than that....assuming payments have been made on time.

Red/Black GT

I was talking to a friend about this a couple of hours back. So glad that on this site, people are just on top of everything.
I planning to put about 10 grand down for a loaded GT, I think GAP will not make any sense for me, but would like to know the opinion of the experts on this site.

Kluski

I am impressed that the headlight still worked.

BlackRiderX

10K is going to be around 33% the value of a fully loaded Mustang. Unless the car depreciates like 10K in one year I wouldn't worry about gap insurance.

Kluski

10K is going to be around 33% the value of a fully loaded Mustang. Unless the car depreciates like 10K in one year I wouldn't worry about gap insurance. [/b][/quote]
If it does depreciate that much, there would be other concerns.

BlackRiderX

If it does depreciate that much, there would be other concerns. [/b][/quote]
Just being hypothetical.

BillP

Back in 1987 I bought a '87 GT. I put 8K miles on it in only 60 days and wrecked in a very stupid accident, fully my fault, that didn't affect anybody else nor their property.

That's a situation that would typically lose about $3K in.

For some reason the insurance company gave me $500 more than I paid for the car including tax and license. I think they based it on typical selling price minus depreciation, or something. I negotiated a hard deal on that, about $2500-3000 under what everyone was paying.

I owned the car outright, so I walked to the same dealer, said "I need a new one" and was out of there in a 1988 GT that afternoon that I finally got my check.

I got extremely lucky, both physically and financially. I learned a lot from that experience.

houtex

On a slightly unrelated to the topic, but still noteworthy because it was IN the topic, the color of the C6 on the third post of that Corvette Forum Post?

:worship:

Now, if they'd just borrow that for the '05 Mustang and beyond...

You know, I've noticed GM using that color for everything, and everything looks great in it...

Now, on topic, I would look into Gap insurance. So maybe. :P

ace0215

Gap insurance is ONLY good if you wreck your car and you owe more on the car then the insurance will pay. Definitely suggested/maybe required on a lease.

kevinb120

Basically if you are financing more then 75% of the INVOICE price of the car(financing including ALL taxes, tags, aftermarket warranties and accesories, and any negative equity), then you should get GAP insurance.

Always call your insurance company prior to purchasing and get quotes on the car insurance and get a GAP quote, so you can figure out your end-cost of the vehicle purchase. If the dealer can not beat the insurance company's price then buy it from them.

kevinb120

all silver cars look awesome at sunset.

OSUstangfan

This is the first new car I've bought, and my previous cars were all bought outright (just $10k cars), so I have never heard of Gap insurance until this thread. My 05 stang came in at $22,003, which includes tax title and license. I plan on putting about $5,000 down. In this situation would Gap be a good decision?

woody1

B) Also consider that most GAP policies will add another $2-3K above insurance value and replacement costs. THis helps offset initial depreciation.
:bang: Would guess insurance depreciation wiil be 12-18% as soon as you drive off the lot.