Gap Insurance? The Dealer I bought from told me I don't need it because my credit score is very good. T or F?

Answer 1

Probably that is true. If you wrecked the car soon, your good credit would roll the loss into the next one. Not smart, but it work.

What Sales Dude didn't want you to realize, is that when you drove your baby off the lot, its value instantly dropped 6 to 10 thousand bucks, like any new car. Next time look at a 2 year old car with like 20K miles and you won't get that depreciation butt-slamming.

Answer 2

GAP Insurance is designed to pay off the difference between your loan and the value of the vehicle if totalled. That way you don't have to personally absorb the depreciation on a new vehicle is you total it.

You are not REQUIRED to purchase gap insurance regardless of your credit (although lots of car dealers will lie about this). Some people like to be covered for every possibility - personal choice.

Check one thing first - some insurance companies these days have a "new car replacement" component to their policy. If you're normal insurance has this then you may not need gap insurance. Check with you insurance agent to be sure.

Answer 3

Gap insurance has NOTHING to do with your credit score.

AND, you're better off buying it from your auto agent, than from the dealership - from an auto agent, it will be true insurance, not some scam deal.

Gap covers the difference between actual cash value of the vehicle, and the loan payoff, for just that vehicle. If the car is worth $10,000, and you put $4,000 down, and your loan is for $6,000, there isn't any gap ($10K - $6K is a positive number) - so it's pointless to buy the insurance.

Answer 4

Car dealership is not your insurance agent! Insure you self from loss is the name of the game. Good credit score is not a prediction of future good credit as is the possibility of wrecking your car loosing your job and having to pay out of pocket hospital expenses and the amount owed on your car insurance did not pay. I would have to say false! but contact your insurance agent. Some cars depreciate so fast that replacement value is not all that good. And then your stuck in GAP Heck!

Answer 5

Hiya:

Sounds like the dealer is looking out for himself....

Gap insurance provides coverage when your vehicle is a total loss and you OWE more on the vehicle than it is worth. Unfortunately...that happens a lot.

In the insurance industry we call this 'being upside down'.

Since you put 40% down...you are not likely going to end up upside down. The down payment essentially lowers what you are going to owe on the car. If you put $5000 down on a $20,000 NEW car and then it gets totaled a month later....It's possible that the market value could have gone up or down. If it went down to let's say 17K....you are still ahead of the game and would come out with cash in your pocket. If it went up to say 22k you would still come out ahead.

That's the benefit of putting so much money down.

Gap insurance ends up being priceless if you don't put anything down and over finance your vehicle....and it's just your bad luck that the car gets totaled when you owe more than it's worth.

In your case, you're likely alright. Most people can't afford to put so much down.

Lucky you!

~jifr!

Answer 6

Like others have mentioned, you really want it if you're worried about being "upside down" on your payments. It has more to do with down payments and how aggresive you're paying the principle than your credit.

If you're interested in getting GAP insurance, call your insurance agent that has your auto policy. Most companies offer GAP at a fraction of the dealerships.

Answer 7

F

Answer 8

F A L S E...........F A L S E...........F A L S E.

Answer 9

F.