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GAP Coverage
- Thread starter Nb1277
- Start date
Do you really need GAP coverage? Whenever I looked into it, it didn’t really seem worth the money. I’m not sure how much you paid down for the car, but the actual amount that is covered with GAP insurance may be pretty small or even zero. And I am always of the opinion that you shouldn’t insure what you can reasonably afford to lose.
PLUGZIN
Member
I agree with RonM. If you were leasing the vehicle it might make sense; but given you are purchasing the vehicle - probably not needed unless you are willing to pay for something that could offer limited benefit.
shanejackson
Member
All gap insurance I have ever seen makes no since. On my jeep it was like $400 for upto $1,000 coverages....no thanks...
Knightshade
Well-Known Member
...huh?
GAP is supposed to cover the gap between the value of the wrecked car and the amount on the loan. Hence the name.
So if you buy a $60,000 car for nothing down...and after 1 year it's only worth $45,000....and you still owe $50,000...and it gets totaled...GAP would cover $5000, to effectively pay off the loan above what your auto insurance paid you for it.
There's some places that offer a "gap plus" deal for a few bucks more where they do the above and ALSO give you an extra 1-2k toward your new car as long as you finance it with them again- maybe that's where you got the "up to $1000" thing from?
shanejackson
Member
No it was up to $1,000. But then again it was the *sugar* the dealership tried to sneak in at the end when doing financing.
Knightshade
Well-Known Member
Yeah, that's not gap insurance then.
I mean- the name is literally describing its purpose. Covering any gap between the depreciated value of the car and your loan balance- no matter what amount that comes out to.
Insurance Information Institute said:
C141medic
Active Member
As @Knightshade stated what GAP insurance can cover, I financed a large portion of my M3 because the rate was so low. My GAP coverage will also pay for my insurance deductible in case of a loss. It only added an extra $400 to my loan. Valuable coverage in my opinion.
Jedi2155
Model 3 has Arrived.
I paid for gap on my (nonexistent car 
). My credit union offered a 0.25% discount off my interest rate for buying it. Sold it for $450, and based on the interest savings with 0.25% discount I'd be saving about $250 over the year 4 year loan (1.74%) with the original down payment I modeled.
In the end decided to basically put close to 0 down and took a $76k loan, leaving me with extra cash to do whatever I want with it (invest, car upgrades, etc.).
My ultimate plan is to continue to save the money over the next 2 to 3 years and monitor the value of the car relative to the loan amount. I expect the car depreciate significantly (being a performance model). Once the value between the loan and the car value reaches the same level, I would pay off the entire loan hoping by then I'd have enough money saved up to avoid further interest charges.
This would provide me with maximum protection in the first 1-2 years where my chances of an accident are highest and would cause the most emotional harm. I'd effectively be out whatever loan payments I've made rather than whole down payment since I imagine the loan would be more than the car value for some time. I wish I extended my loan to a 72-84 month rather than 48 month to maximize the loan to car value (keep in mind that I'd still plan on paying off the car in 2-3 years) but I'd be paying a higher interest rate for that type of protection.
I still feel I might have an accident (having a good driving record for 10+ years) in this car due to it being my 1st performance car + the uncertainties of autopilot.
). My credit union offered a 0.25% discount off my interest rate for buying it. Sold it for $450, and based on the interest savings with 0.25% discount I'd be saving about $250 over the year 4 year loan (1.74%) with the original down payment I modeled.In the end decided to basically put close to 0 down and took a $76k loan, leaving me with extra cash to do whatever I want with it (invest, car upgrades, etc.).
My ultimate plan is to continue to save the money over the next 2 to 3 years and monitor the value of the car relative to the loan amount. I expect the car depreciate significantly (being a performance model). Once the value between the loan and the car value reaches the same level, I would pay off the entire loan hoping by then I'd have enough money saved up to avoid further interest charges.
This would provide me with maximum protection in the first 1-2 years where my chances of an accident are highest and would cause the most emotional harm. I'd effectively be out whatever loan payments I've made rather than whole down payment since I imagine the loan would be more than the car value for some time. I wish I extended my loan to a 72-84 month rather than 48 month to maximize the loan to car value (keep in mind that I'd still plan on paying off the car in 2-3 years) but I'd be paying a higher interest rate for that type of protection.
I still feel I might have an accident (having a good driving record for 10+ years) in this car due to it being my 1st performance car + the uncertainties of autopilot.
C141medic
Active Member
In a similar sitch. DS says only Alliant had gap and they have severed their relationship with Alliant. Gap not offered through Tesla financing. My auto insurer also does not offer.
Researching Travelers, Lib Mutual, Allstate, and Nationwide/Alllied. Being in the industry, the interest is too low not to finance as much as possible, but GAP is essential. The new moniker is New Car Replacement Insurance. Note Travelers does not cover flood, water or theft.
Researching Travelers, Lib Mutual, Allstate, and Nationwide/Alllied. Being in the industry, the interest is too low not to finance as much as possible, but GAP is essential. The new moniker is New Car Replacement Insurance. Note Travelers does not cover flood, water or theft.
This tends to be a highly individual decision. Your reasoning combined with the relatively low price makes a lot of sense.
Personally, I only put 10% down and am receiving 10K in tax credits so I think GAP doesn't make very much sense. I do think the depreciation on the Performance may actually be lower than the regular model. Its unknown, but in other makes, they tend to keep their value a bit better. (BMW M, Audi RS, etc.)
shanejackson
Member
Knightshade
Well-Known Member
Personally I got it because it was relatively cheap and the depreciation of the 3 is completely unknown.... (their GAP pricing doesn't appear to be car specific). It may or may not be a decent bet to make (or even be needed).
The fact I'm getting a tax credit doesn't really change the math as I'd get the same amount from the insurance claim either way.
Knightshade
Well-Known Member
The S is produced in much lower #s at a much higher price, so that's not clear.
For example the Ford Raptor held a TON of value, but the regular F-150 not nearly so much.
CORRECTION: Tesla has not severed their relationship with Alliant. They have prohibited Alliant from offering loans in certain states such as California. This is very problematic. The loan reps at Alliant are not allowed to process a Tesla loan in California and refer you back to Tesla.
JPP
Active Member
...uuhhhh...I have an existing relationship with Alliant (loans on the 2013 S85 and 2015 S70D listed below) and live in CA. I am taking delivery at Fremont this coming Monday of my P3D+. Alliant did 100+% financing for me on the Model 3 without blinking an eye. I worked directly with them (Tesla not involved). Fast and painless. So maybe they cannot accept new members/customers, but existing customers are good to go. YMMV.
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