| almodm |
| What is a good price for Gap insurance on a 2007 MDX? Can this insurance be purchased from an insurance company (as opposed to a dealer)? If so, which insurance companies? |
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| dipersp |
| I picked this up via my insurance company (Allstate) vs. the dealer or bank. Bank wanted around $300 one-time, I forget what the dealer wanted, but Allstate wanted roughly $13 every 6 months. Deal! |
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| G. COLTON |
What is GAP INSURANCE? Never heard of it.
I know about gap wedges and just love mine.
G |
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| hammermdx |
quote:
Originally posted by G. COLTON
What is GAP INSURANCE? Never heard of it.
I know about gap wedges and just love mine.
G
If you lease, it covers the difference on the amount your insurance company pays out and the book value in case the car is totaled. |
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| one4gatr |
quote:
Originally posted by hammermdx
If you lease, it covers the difference on the amount your insurance company pays out and the book value in case the car is totaled.
Not totally correct...
What is GAP insurance?
GAP insurance can provide valuable protection during the early years of your car's life if you have a loan or a lease.
If a loss occurs, GAP insurance will pay the difference between the actual cash value of the vehicle and the current outstanding balance on your loan or lease. Gap Insurance protects your vehicle lease or loan. Sometimes it will also pay your regular insurance deductible.
If your vehicle has been totaled by accident, theft, fire, flood, tornado, vandalism, or hurricanes your insurance company typically pays the actual cash value. That may be less than its actual retail value. It is often considerably less than the actual amount you still owe on your loan or the amount due for a lease payoff.
The amount between your insurance deductible and the loss from this financial shortfall is the “gap” you can be left owing. |
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| dipersp |
quote:
Originally posted by one4gatr
Not totally correct...
What is GAP insurance?
GAP insurance can provide valuable protection during the early years of your car's life if you have a loan or a lease.
If a loss occurs, GAP insurance will pay the difference between the actual cash value of the vehicle and the current outstanding balance on your loan or lease. Gap Insurance protects your vehicle lease or loan. Sometimes it will also pay your regular insurance deductible.
If your vehicle has been totaled by accident, theft, fire, flood, tornado, vandalism, or hurricanes your insurance company typically pays the actual cash value. That may be less than its actual retail value. It is often considerably less than the actual amount you still owe on your loan or the amount due for a lease payoff.
The amount between your insurance deductible and the loss from this financial shortfall is the “gap” you can be left owing.
Yup - that's correct. Loan OR lease. I have a note on my car and picked this up since it was so cheap. |
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| SDTS |
| the key is to make sure that you only do it if you are financing negative equity or putting less than tax and license down....or at least not that much more than tax and license. |
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| G. COLTON |
Why would someone let themselves get into a position where they had that "gap?"
G |
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| andreseng |
G-
The minute you walk out the door with the vehicle you probably have a gap. No one chooses to get in to that position. It's the nature of the beast. It's all about depreciation.
G |
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| G. COLTON |
quote:
Originally posted by andreseng
G-
The minute you walk out the door with the vehicle you probably have a gap. No one chooses to get in to that position. It's the nature of the beast. It's all about depreciation.
G
"No one chooses to get in to that position."
Yes they do make the choice. From what I am told is a gap, it is all about how much money is placed down on the vehicle. That is purely a personal decision.
G |
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| JL_SS |
quote:
Originally posted by G. COLTON
"No one chooses to get in to that position."
Yes they do make the choice. From what I am told is a gap, it is all about how much money is placed down on the vehicle. That is purely a personal decision.
G
If you total your vehicle shortly after buying it, then it is better to have not put anything down and have gap insurance. Say you put no money down and your loan is $40K for your $40K vehicle. After a month you total your vehicle - your auto insurance company gives you the $35K it is worth and the gap insurance covers the rest. If you had put $5K down and did not have gap insurance, then the auto insurance would pay off your loan ($35K), but the $5K you put down is gone. There is a low probability of totaling your vehicle after purchase and not putting money down does hurt you at trade, but you lose that money anyway. Either you lose it as down payment at purchase or you lose it when you are upside down in trading it. |
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| BaldEagle |
quote:
Originally posted by andreseng
G-
The minute you walk out the door with the vehicle you probably have a gap. No one chooses to get in to that position. It's the nature of the beast. It's all about depreciation.
G
??? Are you saying that most (buying not leasing) do not have a down payment? Could understand this on less expensive cars but not an MDX. I would think most buyers of the MDX have a considerable down payment via cash or trade. |
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| one4gatr |
quote:
Originally posted by BaldEagle
??? Are you saying that most (buying not leasing) do not have a down payment? Could understand this on less expensive cars but not an MDX. I would think most buyers of the MDX have a considerable down payment via cash or trade.
I would disagree with you there. You could make a pretty good case to not put money down with finance rates as low as they are. Why would I put down 20k when I can get 36 month financing for lets say 1.9%. I would rather leave the money in a 36 month CD paying 4% and spend $300 for the GAP insurance. Its just a matter of personal preference.
I NEVER put any large sum of money down on a "depreciating" asset. The reason why is because I merely "rent" my cars and dont usually pay one off before I go buy another one. Unlike a home where you can easily get the equity back out a car doesnt gain equity. I am usually "upside down" in my cars but at the end of the day I know I intend to walk away from it in 3-5 years.
Sure it puts me in a pinch in times like now when I "WANT" a new vehicle because of the negative equity but next year it will be all good. It works the same buying and leasing. I buy my cars, my wife leases... I have negative equity and so does she. in 5 years I own and trade it in and (normally) in three years she turns hers in and gets a new one. I am content with never owning a vehicle outright. Its a luxury I allow my self (much like Sat TV, cell phone, etc...)
At the end of the day I would rather have 20k in my bank account rather than a lower car payment and the gamble that if the car gets totalled I am out any negative equity from my down payment. |
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| andreseng |
quote:
Originally posted by G. COLTON
Yes they do make the choice. From what I am told is a gap, it is all about how much money is placed down on the vehicle. That is purely a personal decision.G
G-
So you mean to tell me you check the book value vs. your loan balance every 6 months or so and send a check in to the finance company for any amount that you may be upside down?
It is not merely about how much you put down. It is the difference between what is owed on the vehicle and what it is currently worth. Your insurance company will pay current book value in the event your vehicle is totaled.
For illustrative purposes let's say someone is in the 35th month of a 48 month loan. Even though they put down 20% down when they acquired the vehicle there is now a balance of $10,000 on a loan. If If the vehicle is totaled and the current book value is $8,500 someone would have a gap of $1,500 that the insurance company will not pay. Someone put down a reasonable deposit, yet they are still on the hook for the difference.
G |
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| dj-mdx2 |
| I put down $330 gap insurance on my 07. Didn't think I would but I figured it was (relatively) cheap insurance. |
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| JeffK |
In New York by law, Gap insurance is included in your lease payment.
JeffK |
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