Anonymous
Anonymous asked in Cars & TransportationBuying & Selling · 4 months ago

Gap insurance..is it worth it?

Is gap insurance is a really worth it to have it on your car? Ive heard yes and no. for instance I have a 2015 Chrysler 200 has roughly 121,000 miles on it. I got it in 2014 and the extended warranty is already out on it due to 100,000 miles but I bought an extended warranty so I won’t have to pay out-of-pocket cost if it messes up. now according to KBB my car is worth roughly $4-6000. And i owe about $14,000 (i traded my old car so im upside down. Dumb i know) So if i total it. Will the gap cover the remaining after insurance? Or is GAP something different? Please help

Update:

*Regular warranty is out not extended warranty

Update 2:

Ive been on different websites and have seen different stuff. Just want to know if someone has gap and understands it better than me or hve delt with this before and can give me some info

8 Answers

Relevance
  • Mr.357
    Lv 7
    4 months ago
    Favourite answer

    Without gap insurance, if you total your can, the insurance co will pay you $4000-$6000 and you will owe the lender $8,000-$10,000 after you give them what the insurance company paid you.  Gap insurance will cover the extra $8000-$10,000 that would be owed to the lender.

  • Rob R
    Lv 7
    4 months ago

    Well DUH! Your car is worth 4k & you owe 14k!?!? Well no $HIT it’s worth it. Stupid question.

  • 4 months ago

    (in the old days - my vehicles are now 20 years old) GAP insurance would pay the difference between what you owe [so to speak. There needs to be a better term; like maybe purchase price.]  and what the NEW car is worth. example: The car costs $40,000 but is only blue book valued at $37,000. That extra $3,000 you paid is the dealer's extra profit and if you wreck the car relatively soon the insurance company (without GAP insurance) will not cash you out at $40,000 - only $37,000 and then less the next years as the car depreciates.  After a couple years the car value levels out, and GAP insurance is not needed. CAVEAT: My knowledge is from decades ago. And yes, I did buy it because it was relatively cheap. I would not get it on/for a used vehicle.  Your used vehicle is only worth $4-6000 so I would REALLY DOUBT that GAP insurance pays off your $14,000 loan. Obviously, ask your insurance agent (!)

  • 4 months ago

    i have it ..in simple terms ..you pay $20.000 for car ..the gap insurance is for say 4 years ..after 3 years the car is wrote off ...the insurance company pay you $6.000 ..gap insurance pays you $14.000 ..the whole idea of gap insurance is you back what you paid for it 

  • What do you think of the answers? You can sign in to give your opinion on the answer.
  • August
    Lv 6
    4 months ago

    They have always offered it to me when i buy nearly new cars with little miles on them

    and i have refused every time. It is just another money grabbing scheme for the car industry. If i did buy it, i would be very tempted to burn it a week before its expiry, but i am not like that 

  • JetDoc
    Lv 7
    4 months ago

    GAP insurance helps to cover the balance on your car loan when you owe more than the car is worth. If you total the car and you DON'T have GAP insurance, you'll still owe a big chunk on a car you can't drive.

  • Anonymous
    4 months ago

    A logical and intelligent person wouldn't rely on any answer given here, they would either talk directly to an insurance company and ask them to explain it, or they would at least think to go to an insurance website that explains it. Here ya go lazybones": https://www.google.com/search?q=GAP+insurance+expl...

  • 4 months ago

    Is gap insurance worth it?

    do you have $8000+ to pay the lender in the event your car is totaled?  Depending on how much gap insurance costs, I would imagine it is worth it.

    I bought a new car for $50K+ with $0 down & 0% interest.

    Yes, I'm not increasing the loan amount due to interest, However, I'm going to be upside down on the car for at least 1/2 the length of the loan. 

    - Since I don't want to shell out $20K+ if it's totaled, for "me", I felt it was worth it. 

Still have questions? Get answers by asking now.