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GAP Insurance Question?

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#25 ·
wjfyfe said:
GAP insurance is only useful if a buyer finances a vehicle for more than it is worth, at least that is the way that I see it?
Bill
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We know if the price is 50,000 and when you leave dealership it's worth less, but you owe more that when gap insurance pays off.. no gap insurance you pay the difference. My opion it's worth it.. I don't have it.
 
#32 ·
As others have said, gap insurance is for cases where the vehicle is totaled and the loan amount is greater than the value of the vehicle. With a 15k down payment your loan amount should be less than the replacement cost of the vehicle. You should not need gap insurance but the dealership may try to sell it to you anyway even though it would be completely and utterly useless in your situation.
 
#36 · (Edited)
67GTONUT said:
Former Dealership F&I manager here.....
Gap insurance is for loans...............................................general rule of thumb, you NEED Gap coverage.
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Obviously somebody is in the business of selling insurance here. If a buyer is acquiring a loan amounting to more than a vehicle will be worth after they drive it off the lot, how wise of a purchase can that be? (Did I word that correctly so not to injure anybody’s “politically correct” sensitivities?) :rolleyes:
Bill
 
#37 · (Edited)
zroger73 said:
I recommend avoiding making decisions leading to the NEED for GAP insurance in the first place.
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One thing that pushes consumers to get gap insurance is the extreme length of the loans these days. It takes forever to make a dent in the principle owed on a 72-84 month loan. Those long loans used to be unheard of for vehicles, as the standard used to be 24-48 months. All the while, the vehicle is depreciating by around 30-40% in those 7 years (I know there are exceptions, and we live in a crazy time with higher than usual car values). Too many people are financing $50K+ while taking out 7 year loans, but by the same token when loans were shorter, vehicles were much cheaper.
 
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#40 · (Edited)
Sparkland said:
One thing that pushes consumers to get gap insurance is the extreme length of the loans these days. It takes forever to make a dent in the principle owed on a 72-84 month loan. Those long loans used to be unheard of for vehicles, as the standard used to be 24-48 months. All the while, the vehicle is depreciating by around 30-40% in those 7 years (I know there are exceptions, and we live in a crazy time with higher than usual car values). Too many people are financing $50K+ while taking out 7 year loans, but by the same token when loans were shorter, vehicles were much cheaper.
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In other words, today's society is providing a means for consumers to purchase items in which they really cannot afford, and manufacturers to charge more for higher profits, isn't that what you are really saying? Where would vehicle prices be today if consumers were expected to live within their means?

(Reflecting the criticism that I receive when I state that I refuse to pay the current asking prices for a new Ridgeline!)
Bill
 
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