Hi everyone!
I was wondering if I need GAP insurance from TFS which is $700~. Unfortunately, my car insurance doesn’t offer Gap.
I put $4000 total down for a Rav4 including about $1500 MSD. The sale price was about 10% below retail.
The question is whether I could end up in a scenario with a large gap given that I put $4k down already.
Thanks!
Why in God’s name did you put $4000 down?
People just don’t ask anymore before signing
To meet a credit card spending threshold. But that’s besides the point.
Let’s say I could do it over and could just do the $1500 msd. The question still remains, do I need GAP insurance?
I have been offered the gap around $225 from a Toyota dealer. Lots of mark up in that product. You could try and get the price down. Its also sold online, just google it and see where the prices are.
I personally had to use gap insurance after a totaled car that was 3 weeks old. Best 700$ I ever spent on that insurance, after 3 weeks it was already $4,000 upside down. Just a risk you must be willing to take, if the unexpected happens.
Do you need it? It’s like all forms of insurance…all insurance is money down the drain until you need it.
If I were Bill Gates, I’d self insure…have no insurance except what is required by law. Take the saved premiums, invest it, and see what happens.
However, since most of us are not that wealthy, we need protection in the event of disaster. Personally, the few thousand that GAP covers isn’t worth the $700 for me…basically, it’s like saying there is 20-30 percent chance of your car getting totaled/stolen. Which seems about 100x higher than reality.
FYI, I leased two Prius earlier this decade…I passed on GAP each time and rolled the dice.
IMO…I would not have a new car without gap.
Neither would i.
Thank you everyone! This is really helpful.
I know this question has been beat to death, but if I were to total the car and got the GAP covered, would part of my down-payment be returned if there was a difference between the vehicle value and the amount of money that I put down? (I know conventional wisdom is that you don’t put money down for this reason, but I’ve read conflicting things on whether or not you actually get the money back)
That doesn’t make sense. If GAP is required/used, then you will not get anything back. If the value of the car is greater than the buyout price (which means GAP isn’t required or used), then you may get the difference.
So wait I thought Gap Insurance is included in a lease ??? or only certain car dealers include the GAP ???
Most leasing companies include it as standard, some do not (Toyota comes to mind).
So basically with $4k down theyll be using that money to cover the gap. So essentially insurance wouldn’t help me at all.
Your down payment lowered your current buyout price. If the current value is less than the current buyout price, then GAP will be used to cover the difference.
Tried negotiating, was told that this was the lowest they could go.
Gapdirect is $288 for 3 years. Has anyone used them before?