Hi all, Newbie here. Long time lurker.

We just purchased a new HCHII Galaxy Grey w/ Navi yesterday . We had to wait 3 weeks for it to come in but it was well worth the wait.

Anyhow, we didn't purchase any extra services through the dealer in an attempt to save money. I did purchase an extended warranty today for $940.00 through the internet (8 years/120,000 miles $0 deductible), recommended by many of you.

Our dilemna now is purchasing GAP insurance. I found it online for $349.00 (http://www.gapinsurancequotes.com/) but we're not sure if it's even worth getting it. On their website, the one of the two basic questions were "Did you put less than a 20% down payment on your new vehicle?". We actually put in 25% downpayment so the answer to this questions is 'NO'.

What are your experiences with GAP insurance? Should we buy it? Is it worth it?

Thanks all!

 

Newbie here also, just registered to post in another topic but saw this one first ^_^

The primary use of gap insurance is to cover you if you become upside down in your loan - as in, you owe more than the car is worth. If you get into an accident and the car is totaled, the insurance will only pay the current value, not the full amount of the outstanding loan, and the gap insurance pays the rest of the loan off. Since you put down a sizable down payment, it's extremely unlikely you'll ever go upside down in the loan, and hence, gap insurance will be unnecessary.

 

So if I'm understanding this correctly, GAP only covers the outstanding balance of the loan if the residual value of the car doesn't cover the full amount of the loan. Basically GAP only kicks in when you're loan value is less than the residual value.

What about if your residual value is more than the loan value but less than the full amount of what you paid for, does GAP still apply in this situation?

 

You'd have to check the policy to be sure, I'm not an expert, but I believe that Gap only applies if you're upside down in your loan - their only purpose is to pay off the remainder of the loan itself. The car's depreciation is just gone - the car insurance company will only cover up to the current value of the car at the time of the accident, not the cost to replace it. I've never heard of a car policy that covers the full cost to replace a vehicle rather than just its appraised value.

There is a reason cars are considered the single greatest money pit someone can invest in