Over MSRP and insurance question...

nick112288

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So if you have new car replacement on your policy, and you get in an accident that is the other parties fault, is your insurance covering everything then going after the other parties insurance to recover costs?
 

frankk

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Look up GAP insurance.
^ This

Take out a loan/lease for the entire purchase price and buy gap insurance. In theory, if the vehicle is worth less than your loan the gap insurance covers the difference. It'll cost a few grand in interest & fees to go the loan/lease route but if you're putting $20K at risk it could be worth it.
 

JohnnyBronco

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For the people that don’t know, a bank will not lend over what the Broncos MSRP is. Typically if a dealer can prove “modifications” increased value they might. Think the Tuscany/rocky ridge trucks dealers have. So the people paying ADM are either paying cash or putting a large deposit down to finance the bronco at MSRP. Now they could put agreed value on their policy, if something were to happen but you pay extra for it and the insurance has to agree it’s worth X. I’m pretty sure GAP or regular insurance will not cover anything over MSRP.
Sure they will. Buying a $50k vehicle with $10k trade in which still owes $30 you can easily get a loan for $70. Happens all day every day. You can even roll unpaid purchase balance into a lease. Ask me how I know........
 

JohnnyBronco

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First, you are assuming that a person has to pay 20K over MSRP, this is unproven. I paid under invoice for my Bronco. There are many on this forum that paid no more than MSRP. With a little effort, and if a total loss were to occur in the next year, there will likely be many dealers who have stock Broncos or order for MSRP.

Second, the chance of having a total loss is miniscule based on nation averages. If you look at life from this perspective; that you are afraid to do anything because of the risks, you cannot live your life. Faith is the basis of life for every human being. Don't be afraid. Go out and live your life, and if something bad happens, deal with it at that time. Just don't worry about everything after you have done your best to prepare.
I agree with you. One thing is due to a shortage of replacement vehicles what is the insurance company going to replace your total with. Another is that across the board costs of repairs have skyrocketed and not because of increased labor rates. And hidden damages. Sometimes after the fact the insurance companies are slapping their heads and saying "Dang, if we had know that the hidden damage would bring the total above our % of value to total we would have written this off to begin with"
 

RedHotFuzz

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^ This

Take out a loan/lease for the entire purchase price and buy gap insurance. In theory, if the vehicle is worth less than your loan the gap insurance covers the difference. It'll cost a few grand in interest & fees to go the loan/lease route but if you're putting $20K at risk it could be worth it.
No way GAP insurance is going to cover a $25k dealer markup over MSRP. People who are willing to pay that to be the first Bronco owner on the block clearly have cash to burn and will have to accept the fact that their cash was actually burned if they happen to total their vehicle.
 

PDiddy

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I'd bet they wouldn't pay over MSRP for it though, in which case you're getting your replacement Bronco in 2 - 4 years.
We already had to do this with my wife’s infinity q50s. They did an entire refresh between her totaled 2015 and the new 2016. To get the features she had on her 15, we had to go way up in price for the 2016. They didn’t care at all. Said just send them the contract and they paid it. They spent 30k over the value of her totaled car. I would have no doubt they would pay $5k over MSRP. Over that may be an issue.
 

Greens05

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^ This

Take out a loan/lease for the entire purchase price and buy gap insurance. In theory, if the vehicle is worth less than your loan the gap insurance covers the difference. It'll cost a few grand in interest & fees to go the loan/lease route but if you're putting $20K at risk it could be worth it.
Question is where do you get a loan for an amount over MSRP? Not any banks that I know of would do that.
 

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Sure they will. Buying a $50k vehicle with $10k trade in which still owes $30 you can easily get a loan for $70. Happens all day every day. You can even roll unpaid purchase balance into a lease. Ask me how I know........
Dang, I wouldn't want to go down that road. I was recently watching a video from an x-sales guy about stuff he saw. Touched on car buying perils, and about how some people do that a few times and end up severely underwater in debt. Danger Will Robinson! :)
 

Paloaltoicu

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So, I'm all for capitalism... if you want to spend $25k for a someday standard vehicle in order to be first. Awesome. But do these people tend to pay more up front, or even all in cash? Either way, what happens when you take the vehicle you spent $75k on and then god forbid something happens. Something bad. It's now totaled. Nothing to be done for it. (I'm actually curious when the first '21 Bronco will be wrecked or totaled) I know there is always that initial loss of value right off the lot... but with an OVER MSRP... aren't you just super screwed? No insurance company will pay for that right?! They'll give you $45k and you'll like it, right?
GAP insurance is available in California it cost $800 helps pay off your auto loan if your car is totaled or stolen and you owe more than the car's depreciated value
 

Mickey21

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For the people that don’t know, a bank will not lend over what the Broncos MSRP is. Typically if a dealer can prove “modifications” increased value they might. Think the Tuscany/rocky ridge trucks dealers have. So the people paying ADM are either paying cash or putting a large deposit down to finance the bronco at MSRP. Now they could put agreed value on their policy, if something were to happen but you pay extra for it and the insurance has to agree it’s worth X. I’m pretty sure GAP or regular insurance will not cover anything over MSRP.
Sure they will. Buying a $50k vehicle with $10k trade in which still owes $30 you can easily get a loan for $70. Happens all day every day. You can even roll unpaid purchase balance into a lease. Ask me how I know........
Agreed Johnny, typically a loan (depending on credit rating) will allow for 120/130 even 150% of the MSRP of the vehicle. Not to say that is always a great idea, but depending on your financing you may qualify for, and the current market/bank conditions, your bank might allow for a large amount over the costs of the vehicle... You can watch videos like the one linked below that explain how that can work in some detail. That just isnt the case Monster1926 and hasnt been for some time now. Most banks will lend over the MSRP of the vehicle.

 

IfIHMadeA2021Scout

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I'm surprised no one mentioned the obvious here. If you way over insure a vehicle and it raises the cost of the replacement compared to fixing it, what is the insurance company going to do? Fix it. Then, will you really still want the vehicle?

I've had to handle two of these discussions with insurance companies for the family. One was for a month old Chevy 2500 Silverado with a badly bent frame. They fixed that one as the repairs were just under the cost to replace. This was a clear simple math and policy language decision. The other was for a Jeep Wrangler with repairs about half of the value of the Jeep. They totaled that one and paid top dollar because a death was involved in the accident. In reality they didn't pay for the vehicle; it was a simple way to buy their way out of a bigger lawsuit.

Why over insure and then give them an economic reason to fix what will end up basically being a salvage vehicle without a salvage title?

What would the value of the vehicle be then? A Carfax report would definitely show that mess.
 

frankk

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Question is where do you get a loan for an amount over MSRP? Not any banks that I know of would do that.
It's not totally foreign. Dealers somehow cut loans for people with negative equity on their trade-in. For example, a loan that covers the cost of the new car and the $3000 difference between what you owe on your trade-in and what the dealer is giving for it.
 

Felix808

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Look up GAP insurance.
Yep this is the only thing that is going to cover you in the event of an accident after paying over bluebook market value or carrying a loan greater than the value of the vehicle.
Though different states have different laws & conditions.
 
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