auto financing?

Question

gap dealer markups

Answer 1

You mean GAP insurance mark-ups over what the dealer is paying the bank. (GAP is offered from the institution who finances the car, not the auto insurance company)

Usually there is a little bit of a mark-up, but not a whole lot, although I've seen it as much as doubled.

They do bump the interest rates up a bit, too. In other words, the bank approves you for a rate of say 8%, they then sell it to you at the rate of 10% and they keep the 2% difference from the bank.

Best thing to do is to find out from your bank (or credit union, etc) what kind of interest rate you qualify for, and what price the GAP insurance would run you. Then you're better armed to negotiate at the dealer, and you can always finance through your bank if they won't get to where you want to be. Some insurance companies like State Farm now also offer financing on your vehicle, so you could price through them as well.

Always shop interest rates on a big purchase, it can save you thousands of dollars in the long run.

Answer 2

Do you mean the markups the dealers charge is over, or more then the value of the car? If that's what you meant, the value isn't always based on a newer car being worth more. An old corvette could cost many thousands. If you mean gap insurance for the car, that's dependent on your policy, you have to pay more and the policy has to allow it.