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GAP insurance, Where do you buy?
Old 08-18-2014, 06:26 PM   #1
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GAP insurance, Where do you buy?

Hello folks,

I am getting a new vehicle. I am paying $8200 from my pocket and getting an auto loan of $20,000 from a local credit union. GAP insurance didn't come with it, neither they offered it (and I forgot to ask).

State farm, my auto insurance company, does not provide GAP insurance unless its financed through them.

What are my options? I am called CU tomorrow first thing, but if they don't have it, then what? I found gapdirect.com but thats it.

Any more pointers? I do not want to pay $595 to the dealership. Although I have not wreaked any car in the past, this is my first new car so not taking any chances.

Many thanks.
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Old 08-18-2014, 07:09 PM   #2
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Why do you need it when you are putting that much down? I know the car will depreciate when you drive it off the lot, not $8200 worth. I thought GAP insurance was for people who put 0 or very little down.
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Old 08-18-2014, 07:11 PM   #3
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You do understand your car will be insured for the depreciated value, not the amount of the loan, right?
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Old 08-18-2014, 07:27 PM   #4
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Quote:
Originally Posted by REWahoo View Post
You do understand your car will be insured for the depreciated value, not the amount of the loan, right?
Are you talking to me, or the OP? The OP realizes it, because he thinks he needs GAP insures to cover that gap. My point is that there probably won't be a gap, or a very small one at most, since he put a lot down.
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Old 08-18-2014, 07:32 PM   #5
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Quote:
Originally Posted by RunningBum View Post
Are you talking to me, or the OP? The OP realizes it, because he thinks he needs GAP insures to cover that gap. My point is that there probably won't be a gap, or a very small one at most, since he put a lot down.
The OP. And my question was to insure he knew what the gap was. Since we haven't heard from him, I'm not as convinced as you that he does.
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Old 08-19-2014, 12:47 PM   #6
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Yes folks. I understand what the GAP is and what this insurance is for. Although I am putting >20% down, I am so paranoid at this moment that I am trying to cover all bases, even if it is not 'required'.

This is my first 'new' car, and it may not depreciate by $8K the moment its off the lot but I don't know how auto insurance companies run the number in case such event happens after the first year. Hence trying to be extra cautious.
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Old 08-22-2014, 03:12 PM   #7
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I thought some of the new policies that offer new car replacement would mitigate the need for GAP insurance. GAP insurance IMHO protects the lender, not the borower and I would only use it if I had no other choice. I just applied for a car loan at Navy Federal and although they offered the GAP coverage, there was no requirement and certainly no pressure to obtain it. In fact, they never even asked about LTV for my purchase.
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Old 08-22-2014, 06:55 PM   #8
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Unless you put very little down you really don't need GAP insurance. Generally speaking, insurance companies pay very well. I had an Chevy Equinox totaled after being hit by a hit and run driver. The car was worth $15000 wholesale, $17,000 retail and the insurance company paid us $20,000. I was surprised but told that insurance companies want satisfied customers.....so, quit worrying, enjoy your car and the probabilities are you won't need GAP even if you have an accident. I could be wrong but I don't think so.
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