I purchased my Tesla with Tesla (Wells Fargo Financing) and I was looking over the paperwork today and it doesn’t look like I have gap coverage. I called Wells Fargo and they said to contact Tesla to have them undo the loan and redo with gap added as they can’t do anything now. This seems more like a PITA than anything.
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Gap Coverage?
- Thread starter Cata
- Start date
you only need gap coverage if you didn't put ~20-30% as down payment into the car (either as cash or trade in) and financed nearly all of it.
if you don't have $10k in equity... i would advise against buying a $50k vehicle tbh.... but everyone is different...
current interest rates make financing nearly the entire vehicle *very very* expensive and you will have paid thousands in interest $ over the years.
Chewy13
https://ts.la/nick670348
I was able to do "loan insurance" through my insurance provider - and was told it can be canceled at anytime. Look into that maybe? And it only added $78/year to my premium.. I was able to justify $6.50 a month for a little peace of mind, and can always remove it later.
GAP coverage on a loan is always an optional purchase on a loan, so I have no idea what you are saying here in this thread other than " I didnt tell them I wanted gap coverage so it wasnt added on my loan".
Chewy13
https://ts.la/nick670348
I think its all the same. Gap coverage is to cover the potential gap in what a vehicle is worth, and what its financed for (I am reasonably sure you are aware of this but I am just making the statement as part of my explanation). Gap coverage can usually be purchased with the loan, or through your insurance company, and its the same coverage (they just may charge different prices for it).
Like, Financing gap coverage through a regular car dealer is one of their profit centers, and they tend to charge "a lot" for it. Getting a loan through a separate financial institution for a vehicle, many of them offer to add gap coverage to the loan for a fee.
One can normally contact their insurance company and see if they will offer gap coverage on the vehicle. If you put enough down, there usually isnt a gap, but if one is doing a minimum down type loan, there normally is.
Still, if Gap coverage was something this OP was expecting, Even if Tesla does not offer it, The time to investigate that / Ask for it is before doing the loan, so I still dont get the "wtf" nature of this first post.
My thoughts were a little different. I was referring to the coverage needed to cover two vehicles on one insurance policy.
As opposed to loan gap which covers the difference between vehicle value and loan value in case the car is totaled.
Difference mainly being if you are in a wreck and the vehicle isn't totaled.
And I know that some insurance policies do better than loan gap, in that they can pay for replacement as new value.
Gap coverage is something an insurance or finance company add on that is extremely profitable for the insurance/finance company. A very one-sided type of insurance product (heavily slanted to the insurance company's profit margin).
You should also never finance anything that you would be so upside down on the loan that you would need gap coverage.
You should also never finance anything that you would be so upside down on the loan that you would need gap coverage.
Chewy13
https://ts.la/nick670348
Unless Tesla decides to drop pricing by thousands of dollars.. in which case maybe have Gap insurance for a year, in case your car gets totaled in that time..
jjrandorin
Don't take this the wrong way as I am a newbie, but how did you become a moderator with what seems to me to be a snarky attitude. People are just looking for advice, not a judgmental takedown.I think you mean in the case where financing is the only option (i.e. couldn't not finance that much).
Back in the day, one could get 0 down and 0% financing. Even now, if you can find investments with better rates than the loan, why expend your cash on a down payment? Om that situation, GAP insurance is an optional hedge against the replacement value loan difference.
yeah... on an inflated car price because the dealership just makes the money on the sales price...
nothing is free. certainly not 0% for 0 down.
If vehicle price is fixed due to employer-OEM agreement, then financing is an independent variable.
Would have been X dollars loan regardless of rate/ term. 0% gave lowest total cost.
GAP coverage on a loan is not much. I paid $250 on one car in the past, $500 on another.
As for the “wtf” attitude, I’m supposed to be mailed paperwork and I figured it would be in the Wells Fargo packet when I get it. I wanted to be preemptive in adding it just in case (though it’s not clearly not an option with Tesla). Plus opting into GAP can be done within 30 days of a loan origination, it was not an option when applying for a loan in the app.
My insurance company doesn’t offer GAP coverage or loan/lease payoff. I could change companies and pay double but that makes zero sense.
I did put 20% down on the car, but I still think GAP is wise on most new cars that are financed.
As for the “wtf” attitude, I’m supposed to be mailed paperwork and I figured it would be in the Wells Fargo packet when I get it. I wanted to be preemptive in adding it just in case (though it’s not clearly not an option with Tesla). Plus opting into GAP can be done within 30 days of a loan origination, it was not an option when applying for a loan in the app.
My insurance company doesn’t offer GAP coverage or loan/lease payoff. I could change companies and pay double but that makes zero sense.
I did put 20% down on the car, but I still think GAP is wise on most new cars that are financed.
This is like saying "with all due respect" and then following up with blasting someone. There is no advice being asked for in the first post. It says in its entirety:
Perhaps I missed where they were asking for advice, but it reads like "Tesla didnt add gap insurance to my loan, how could they have forgotten to do this for me? Now, I have a big PITA trying to do it myself".
It reads like "They didnt do this" not "I forgot to ask for this, any suggestions on what to do now?" Those are different to me (accountability), so I responded with that information.
In any case, Im not responding as a moderator. Most of the time I am posting, unless I specifically call it out as moderation content, its just as a regular user like everyone else. If there was something wrong with the thread from a moderation perspective I would have done something, but there isnt.
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No need to be passive aggressive. It’s a turn off to new members.
nah. not really.
first of all the cost of gap insurance for the Tesla will be $500 (or higher) from a third party .... Some dealers LOVE pushing gap insurance like no tomorrow because it makes them a lot of money.
second... with 20% down (and assuming you finance for ~5yrs) ... the car value would have to drop quickly for gap insurance to make sense. You are already 20% into the loan when you drive off the lot and then every month add more equity. in the worst case you should always have a few $k for rainy days and repairs saved regardless.
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