When to dump GAP insurance?

Then you had zero equity.

If you had not made the 10k payment, your payoff would have been the same as your trade in amount.

OK, thanks. I think we’ve beat this to death. 10k equity of my own money which was in the form of my initial down payment.

Tomato/toma-TOE

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Keep in mind that when you lease this car, your payments only reflect the depreciation and monthly rent charges, whereas the financed payments are for the entire value of the car.

The reason I’m warning you is when you get close to the end of your 3 year lease, you will be surprised at how high the payoff amount is. You’re right in that the Highlander has excellent resale value, but don’t be surprised if you’re still upside down near the end of a lease - which is why people are recommending you keep the GAP.

As time progresses the amount you will get back is less and less. Not worth it imo but as stated above everyone’s risk tolerance is different.

Yea, I hear ya. It sounds like most people’s opinion is to keep it. Let’s say you cancel today and get $500 back. You are probably not going to want to roll around with no Gap insurance, so you buy some more at a cost that will amount to between $300-$400. So you do all that for $100 to $200.

What others are also trying to say is that the residual is the expected future value at the end of the lease, hence, no matter what you put down or how good of a deal you get, you are always working your way down to break even on a lease. So if you are looking for that sweet spot where your payoff equals your value then it really isn’t supposed to come until the lease is over = you need your Gap insurance the whole time.

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thank you. i am not anticipating any equity at end of lease.

as previously mentioned. trying to see if there are solutions to correct my initial mistake of buying GAP from TFS. At the end of the day its a $750 lesson and mistake that will not be made again.

Although, not sure if we’ll do a Toyota next time around. Odd that they’re, at least appear to be, the only major manufacturer’s captive that doesn’t include GAP in the lease.

well put. thanks for you thoughts.

First lease I’ve negotiated. One is never done learning. Up until I stumpled across this site I had no clue about the nuances of leases. I have learned a tremendous amount from the community on this site and will continue to do so.

Appreciate everyone who took a few moments to respond.

GAP isn’t a bad thing, just most captives charge too much. Next time try your insurance company, rates are usually much more reasonable.

As far as mistakes go, this isn’t such a big one. At least you didn’t pay 400 dollars for etching!

Oh, i understand its not bad. That’s why I bought it when signing papers. Was uneducated about my options, but did not want to sign without it.

GEICO doesn’t offer it. :expressionless:

Yea, all in all i don’t feel bad about where I ended up. But the GAP did add about $20/month.

I have Progressive for insurance. When I leased my current Tundra the dealer wanted $695 for GAP. Progressive offers it for $6 for 6 months - $1 per month. On a 36 month lease I am paying $36 for GAP. As long as my insurance company offers it I refuse to pay for dealer GAP.

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maybe i should look at new car insurance! LOL

Just ran a quote with Progressive. It is absolutely killing Geico. ~$250 cheaper. I think the Homeowner’s is cheaper than what we’ve got too. Thanks for chiming in!

Glad to hear it. I went from AAA to Progressive after a water damage claim. AAA raised our homeowner rates 100% so we jumped ship. Progressive has been nothing but good to us.

They want $13 every 6 months for GAP on the Highlander. About $78 for the life of the lease. I think I’ll be switching insurance companies and going to my dealer to cancel the GAP. :stuck_out_tongue:

edit:spelling

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Glad you figured out what was best for you :+1::+1:

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About $2 / month sounds right to insure ~$2K in the event of a total loss…

which is a helluva lot better than the $20.83 i’m paying now.

I guess thats how they make money on this… When car is brand new and the “GAP” is $10K … they sell the “risk take over” to the consumer for $20/month ( still a rip-off IMO)… But when the gap narrows as the time goes, they still keep charging the same ( or better yet, collected upfront) in which their profit margin compared to the pay off increases exponentially. That’s why one should cancel as soon as he/she is comfortable with the risk.

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