Buy GAP INSURANCE at the dealership or no?

As the title states, what do you folks think? TIA!

 

Do you expect to be upside down on the loan? If so I would consider it. Otherwise no

 

I wouldn't buy anything like that from the dealer. If you feel you need gap coverage I would only get it through your insurance company.

 

Not all insurance companies offer GAP coverage believe it or not lol.

 

if you are putting no money down then maybe.....if you are putting enough down to cover any depreciation from driving it off the lot, then naw.

 

There may be exceptions, but if you can't save up enough of a deposit to cover that early depreciation, you likely cannot truly afford the vehicle.

 

must be an Alabama common sense thing..... if you need GAP you need a cheaper vehicle......

 

I wouldnt, especially with a toyota. Depreciates very slowly and these days its not uncommon to get the same, if not more for a car when selling it used.

The good thing about GAP though is you can cancel it anytime and you get refunded a portion back of what you didnt use. At least, my CU did that when I bought the truck in 2020.

 

I got screwed when my car was stolen a long time ago though. Got a Honda Civic stolen from the front of my mom's house, I was on the hook for like 1,500. LAPD said I shoulda just left the keys in the ignition. LOL.. atm I was like wtf, but I got it now.

 

Sorry you had a vehicle stolen, but why would it matter if the keys were in it or not? It was stolen either way. I feel like if you left keys its easier for them to put the blame on you. I have limited experience and am truly just curious.

 

Yeah, nevermind I waited 7 hours for them to show up. I ended up going to the station to report it. What they meant was they were easy to steal. It was an 03 model sedan.

 

Ah

 

Because the scumbags get to court and their attorney tells them to say that you gave them the car and that’s why they have the keys. Now it’s your word against there’s.

 

GAP can be beneficial, but look around. I'm retired Navy, and my ex-wife works at Navy Federal Credit Union. TONS of young sailors tend to get large loans and overpay on new vehicles, and although the credit union isn't supposed to recommend any products, they're able to hint around enough until the sailors get the point. Back when I was a young sailor, GAP was $99 for the entire loan, no matter the amount. Even now with NFCU, it's just $299 total for the loan. You pay that up front so you've not added it into the loan, and they're very good about paying off cars deemed totaled and below book value.

Your dealer is likely making a profit, as they do with financing, and the terms are always negotiable. There are VERY few cars that don't depreciate at least 10% the second you drive them off the lot, and if you're not putting at least that much down, GAP may be for you, but again... Shop around. As mentioned above, Insurance Companies may either sell you a policy outright, add it to your monthly payment (usually just a few $$ per month), etc. Ask your bank or credit union.

While you're talking about dealerships, even the interest rates are negotiable. I go to NFCU, get their best rates, and determine how much I'm putting down. I then apply for the remainder of what I am willing to spend, including taxes. I then go to the dealership with a pre-approved check, hit the lot, broker a deal on the TOTAL OUT THE DOOR PRICE, including taxes, tags, title, etc.. When they ask about financing, I don't tell them the amount I'm approved for, as they'll always hit the max number, but just the interest rate, and ask if they can beat it. I let them try once, and 95% of the time, NFCU rates are better. I've had an instance or two where the dealerships have beaten NFCU, but that's been many years ago.

And...when the dealer offers financing if you go that route, they make money by adding more interest than the lowest you're approved for, and get kick-backs. If they tell you that you got 7%, you likely got 4.5, and can argue total price out the door and payments. I like total price, as that is a final number that isn't able to be moved back and forth.

 

I do not buy gap because I always bring a lot of money and a trade to the table. No dealer ever seriously even tried to sell it to me. They all just kind of mention it in passing on the way to the warranty speech. With trade I basically put down 50% on this last truck.

when I first started buying new cars 15-20% or so down with trade was average for me. I have never signed for More than 60 months and always finish it early.

If I could not pay cash yet I at least wanted the flexibility to get out of something in a couple years if I needed to above water and without having to write a check.

 

If you want to be really cautious you can buy then cancel it in like a year