GAP INSURANCE DO AND DON'T

[NayNay]

I searched for a good thread on GAP insurance and could not find one. So for those who have no clue here is some advice from a Ford finance director......
If you're financing your new Bronco the 1st step is to call your insurance company and ask them if they offer it and what does it cover and how much is it. If you are using your own credit union or local bank ask them the same questions. As with most things you want to compare this. A pro to going with your insurance company instead of putting it into a loan is that if you get ahead you can cancel it with a phone call. When placing it into your loan you cannot just cancel it and you'll be paying interest on it. A pro on financing it into your loan is if something does happen to the vehicle and you need to replace that vehicle you will be able to easily prove to a new lender that the vehicle will be paid off since it us in your contract. Price is another factor too. A dealership has their own cost and of course they add a mark up. Cost can also vary with your term. A 48 month loan should cost less than an 84 month loan. Also remember to factor in your loan to value on the vehicle, along with how you'll use your vehicle. Get the facts 1st. Do not allow other people's opinions to influence what you do. They are not paying your loan for you. Every situation is unique. If you have questions regardless of where you're buying from let me know.

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[Broncocito]

Yep, this is sage advice. Thank you

 

[broncoj11]

Is gap insurance worth it if you’re putting down more than 20%?

 

[Garemlin]

My local credit union offers gap for $300. Worth it for the piece of mind.

 

[BlueBronco]

As there are a lot of first time and novice car buyers on here it might be best to define GAP insurance and explain what it is and what it isn't.

 

[Lowcountry Bronco]

My local credit union offers gap for $300. Worth it for the piece of mind.

Yep, Navy Federal is $299, wonder what the break even point is though since I'll be putting at least 20% or more down as well.

 

[bbqbronco]

You tryna say something about all the newbies deciding to rock crawl their 50k rigs? I'm included lol. Good info

 

[deejay08]

Is gap insurance worth it if you’re putting down more than 20%?

more than 20% down on a Bronco i would say GAP is not needed as I imagine it's not going to tank in value and leave you upside down on a loan. Maserati sedan on the other hand? Gap the shit out of that thing.

 

[andi]

I would believe through insurance would be better to not add negative equity to your loan, but like OP said, price is a factor as well

 

[JayKay]

I searched for a good thread on GAP insurance and could not find one. So for those who have no clue here is some advice from a Ford finance director......
If you're financing your new Bronco the 1st step is to call your insurance company and ask them if they offer it and what does it cover and how much is it. If you are using your own credit union or local bank ask them the same questions. As with most things you want to compare this. A pro to going with your insurance company instead of putting it into a loan is that if you get ahead you can cancel it with a phone call. When placing it into your loan you cannot just cancel it and you'll be paying interest on it. A pro on financing it into your loan is if something does happen to the vehicle and you need to replace that vehicle you will be able to easily prove to a new lender that the vehicle will be paid off since it us in your contract. Price is another factor too. A dealership has their own cost and of course they add a mark up. Cost can also vary with your term. A 48 month loan should cost less than an 84 month loan. Also remember to factor in your loan to value on the vehicle, along with how you'll use your vehicle. Get the facts 1st. Do not allow other people's opinions to influence what you do. They are not paying your loan for you. Every situation is unique. If you have questions regardless of where you're buying from let me know.

Does Ford include their GAP insurance into their leases? My Jeep through Chrysler financial and my wife’s car through GM financial both had GAP included already.

 

[LarryZiegler]

Yep, Navy Federal is $299, wonder what the break even point is though since I'll be putting at least 20% or more down as well.

In Calif, when I financed my Honda Pilot w/a $1,000 down payment, I added GAP to my Nationwide policy and it was under $60/yr. and I removed it after 2 yrs of payments at 0.9% interest and made sure the loan payoff was less than KBB Trade In Value. Pilots also carry an above average value as they age.

 

[Beach_Bum]

As there are a lot of first time and novice car buyers on here it might be best to define GAP insurance and explain what it is and what it isn't.

A common misconception on GAP insurance with novice car buyers is the perception of what it accomplishes. Some think the GAP insurance pays the difference between the Actual Cash Value and what it costs to buy the vehicle new. The ACV is a factor of depreciation and what your insurance policy pays to buy a similar used truck. If the ACV is 25K but you owe 30, then the GAP insurance pays the 5K difference. It doesn't make up the depreciation value between the ACV and a new vehicle.

 

[AzScorpion]

I would believe through insurance would be better to not add negative equity to your loan, but like OP said, price is a factor as well

I always make sure my insurance has full replacement value whether it's my houses or my vehicles. No need for gap doing this.

 

[NayNay]

Does Ford include their GAP insurance into their leases? My Jeep through Chrysler financial and my wife’s car through GM financial both had GAP included already.

Great question and I do not know the answer to it. From what I recall GAP is not included and is an option.

 

[LarryZiegler]

I always make sure my insurance has full replacement value whether it's my houses or my vehicles. No need for gap doing this.

Car insurance is always based on ACV, not Replacement Cost, unless you buy that option with a new car purchase. It also has coverage limitations. New Car Replacement can’t be bought with used cars. The closest thing is Liberty Mutual, who offers a 1 year newer valuation on a total loss.

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