Gap insurance when your lease is a GREAT deal

Ask the Hackrs
1

Hi Guys,

I want to get your opinions and start a dialogue on GAP insurance when you have a great deal.

If the deal is achieved through great rebates and smart negotiation one can trim a large percentage of the MSRP of a vehicle and at that point does it make sense to buy GAP? Usually for Car purchases of brands that retain value , i.e. Honda if the down is over 30% of the car and you have a 4 or 3 year loan it doesn’t make sense to get Gap, one will more likely never be underwater on the loan.

I want to know what you guys feel about Gap in relation to a lease.

For example, currently there Kia, that has an MSRP of 27k , and with lease cash back and negotiation the purchase price is 17k now. It has a manufacturer’s residual of 55% or around or $15k. Now if I look at 2 year old versions of this car with around 24k miles that is around the price they go for so the residual seems to be a good marker of what it will actually be worth.

So as I get the car and drive off the lot the car automatically loses it value, but does it lose it to the point of $10k? Will the great deal be able to stay ahead of the depreciation?

I ask this because my insurance doesn’t offer gap and I feel like the cost of gap offered at dealerships are often over inflated.

2

I just leased the Kia optima hybrid and got the deal that you mentioned. That said, according to the finance officer and the paperwork that I signed, GAP is included in the lease a no additional charge.

I also leased a 16 camry se and know for a fact that GAP insurance was not included and was available for purchase. My insurance does not offer GAP, so just hoping all goes well.

-Ivan

3

I believe most leases now include GAP coverage. I know all GM Financial lease come with built-in GAP anyways.

4

That’s something new. I guess the protocol has changed since the last time I leased a car in 2011. Thanks for the info.

5

lease through Honda also includes GAP insurance. You can find the information at Honda Financial site

6

So as VW.
My question rather if there is a point to pay anything at all out of pocket?
If you have GAP insurance why not roll in all fees into the balance and take $0 sign and drive?
Isn’t GAP insurance will cover all that extra anyways?

7

That’s my strategy. Paying money up front could save you a little on rent (interest charges), but I like being able to drive away with a new car without playing a single cent. :slight_smile: