Gap insurance

[Hdang1980]

I like this. My GF did get gap insurance, but we plan to cancel it just as soon as the first payment comes up, and she mostly, if not completely pays it off. On the extended warranty thing, she went for the lower one there, but also cancelable.... and I told her, just ask my ace mechanic friends advice next week when we see him for an oil change on her old car. I think she needs to hear about all that from someone else At least she listened to me, and kept up the fight, getting our price all the way down to the original price (close to MSRP) they had offered us. That was a 6 hr battle ! Glad she was as stubborn as I am. That's not always good, but this time, we were a team of stubbornness lol

They tried to add a markup to your truck? Which dealership is this? I ordered mine thru Harrold Ford.

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[2cafn8d]

I have bought gap for every car I have bought through a dealership. I've known too many people that didn't want to pay for it and got screwed because their car got totaled. For me it's the "I'd rather have it and not need it, than need it and not have it" scenario.

I'll get it on my Maverick too, I can't predict the market.

 

[Ronaldo]

Please know my intentions are only good here. I am that guy who doesn't do debt so take it with that grain of salt.

If your son can only afford $1,000 down, why is he buying a new car? He should be buying a $5,000 car at best. Then save up, have $3K in equity after paying it off and buy a $10K car. Pay it off, save up and buy an $18K car. Wash, rinse, repeat.

Auto loan debt is financial slavery just like credit card debt. A new car only compounds the issue even worse.

Best of luck.

Thank you Dave Ramsey. (I love that guy) They are offering 0%, .09% and .19 % for 3, 4, and 5 years. If he buys a hybrid XL for 21,500 and he saves money on gas, maintenance, and warranty it makes a lot of since. This may be one of the only cars/trucks that make since. I tried to get my son to buy a Maverick but he likes his 08 335i that he can’t afford to maintain or pay gas on. I tell him he is going broke trying to look rich.

 

[DSMMaverick]

I don't plan on putting a whole lot down and won't bother with GAP insurance. Trucks hold their value extremely well in the Midwest and the Maverick will be no different. I ordered AWD which really helps in the Midwest with value retention. Insurance companies pay ACV which is based on the market value. I anticipate with demand and dealerships selling over MSRP the value will be higher than what I will pay for mine. In the event the value tanks and off chance I total it out I have plenty of savings I can dip into.

 

[sn00pyguy]

I experience lack of gap insurance. It cost me about $3000 that got tacked onto the new car. This of course depends on the cost of the new car. In my case, it was 20% of the new car price or $3000. So, if your gap insurance cost less than a $1000, it is a worthy risk. Ask your insurance agent or car dealer what the gap would be on the new car.

 

[NewBernWolf]

GAP is really a waiver, not an insurance policy. Your auto insurance will only cover the actual cash value of the vehicle. If you owe more than that, you're on the hook for it. If you have a GAP waiver, you're off the hook. It's really quite simple.

What if the accident was your fault?

 

[FriscoTXJoe]

I tell him he is going broke trying to look rich.

That right there is the problem. Might wanna remind him his car is 14 years old. Older than the average vehicle on the street. Nobody rich drives a 14 year old car. (BMW's are a repair nightmare!)

 

[inferno]

Does he have the cash on hand to pay off the remaining balance on the vehicle if it were to be totaled? Is he a responsible driver or risk of an accident/any prior accident history?

Insurance is too much like gambling.. it depends on too many factors.

I personally don't get it but I'll only be financing about 30-40% of the vehicle and have emergency funds saved should something unfortunate happen.

great point, he does unfortunately have an at fault accident a few years ago.

 

[inferno]

Please know my intentions are only good here. I am that guy who doesn't do debt so take it with that grain of salt.

If your son can only afford $1,000 down, why is he buying a new car? He should be buying a $5,000 car at best. Then save up, have $3K in equity after paying it off and buy a $10K car. Pay it off, save up and buy an $18K car. Wash, rinse, repeat.

Auto loan debt is financial slavery just like credit card debt. A new car only compounds the issue even worse.

Best of luck.

With rates as low as they are I recommended to him to put the least amount down to get into a comfortable payment. He is 21 years old and has been driving his Jeep that we paid cash for, for the past 6 years. Unfortunately he wants to keep the Jeep for the weekends so your reasoning about buying, selling, repeat is out of the question. He just needs something with better gas mileage for his 50-60 mile a day work commute as the mileage on the Jeep is now exceeding 200,000.

 

[2cafn8d]

That right there is the problem. Might wanna remind him his car is 14 years old. Older than the average vehicle on the street. Nobody rich drives a 14 year old car. (BMW's are a repair nightmare!)

I actually know several people with money driving older cars because they like them, but you are right, they usually have something new in the stable as well... you know, for when the old car brakes lol.

 

[inferno]

Nationwide (which we have now) does offer GAP - but please note they don't cover any amount you rollover.

Geico does not offer GAP in my state. They were my previous carrier.

GAP is included in a lot of leases, but it is usually something you have to opt for in a purchase loan.

He has Geico and like you said, they don't offer gap here in Florida either.

 

[Atisko]

He has Geico and like you said, they don't offer gap here in Florida either.

My friend owns a gap insurance business I think they do sell the product down there…

 

[MakinDoForNow]

Some insurance company’s include with policy now and ford motor loans use to include gap with loan

Consider asking agent about replacement coverage if vehicle is totaled (some replace with year newer and less milage). But will not necessarily but substituted for financed vehicle so will have to possibly have to come up with some cash do not actually know how this would work out. Possibly insurance would pay off loan and give you some cash but suspect you may still have to come up with some?

 

[inferno]

Wow, lots of responses while I was away from my computer. Thank you!

After reading through I think the best thing for him would be to either get the GAP or put more money down, so we will be weighing his options.

Thanks again for all the responses.

 

[GaMaverick]

I got gap insurance. Last time we had gap insurance and traded our vehicle early before paying it off we received around $2k back from gap insurance.

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