GAP insuracne or new car replacement premium?

[BigAirHarper]

Trying to decide on my GAP coverage options:

1) $399 with Alliant for the GAP coverage which covers the cost of loan if it gets totaled by insurance and I don't get full value remaining on loan, also covers $500 of deductible for 1st 3 years if there is accident filed with insurance

2) USAA offers new car replacement help, where they offer the value of vehicle if totaled PLUS 20% on top of that, only $45 extra every 6 months

It would take over 4 years paying the premium to get to the cost of the Alliant gap coverage (probably won't have the car that long). USAA coverage might not cover cost of loan but should be close enough (I'm not worried about a few thousand here or there, just a massive chunk)

I've never done this on any car, but this is also the most expensive car I've ever bought and most expensive car to repair I've ever bought. Would love the opinions of the group on this one....

EDIT: HAHAHA wow I need to check my typing speed and look at the title spelling before I hit post. Whoops, mods could you fix if you get a chance. Thanks.

 

[TaoJones]

Those are both interesting options. I lean toward the former ($399 through Alliant) because:

1. The likelihood of an accident that triggers a deductible is greater than that of (only) a total loss.

2. The latter is tied to a specific insurance company. And while USAA is solid, people tend to change insurance companies more often than refinancing a car loan. Nice to have the option to switch insurance companies.

One thing to check is for how long the gap coverage is available. One company I called offered it for only 2-3 years. While financing-dependent, that may be enough. Tangentially, am still trying to wrap my head around why anyone would choose for example 108-month financing - an option a Tesla employee told me about last month while at one of those gallery social hour things. Although now that I think about it that may have been a lease.

That $399 option is interesting partly because you get it back plus 25% if you are found at fault for an accident in the next few years. But therein lies the rub - the time fuse.

it seems to comes down to the probability of having an accident. Which touches upon where the car is driven and the insured's propensity for accidents. And the impact of having an accident, financially and otherwise.

Actuarial types have all the fun; it would be interesting, if slightly morbid, to see current data across the board for Teslas in accidents and Teslas totaled by region/down to the county level. Especially as a percentage of total sold.

 

[Austin Powers]

In case of Alliant, does the 'time-fuse' apply to the GAP coverage or the deductible?

 

[javawolfpack]

I'm leasing so no gap insurance provided by the lender as an option... least that I've been offered. I am opting to switch insurance companies from my existing insurance for my home & current car as the new insurance includes new car replacement for the first year the car is new (this is assuming you have comprehensive insurance), and you can opt into "better car replacement" which is basically the value of your vehicle a year newer or 15K less miles after the first year... basically a type of gap insurance under a different branding. My existing insurance agent didn't seem to know what gap insurance was, which is another reason I'm switching.

 

[BrandonR22]

I work for the 'better car and new car replacement' company.... it's not a joke/ scam... we really do give you the value of the same make / year w/out deprecation for new car replacement. With Better Car Replacement we give you the value of a 1 year newer car WITH 15K less miles than what you had on your total loss. One side note to New Car Replacemeny is it's good for the first year, or up to 15K miles. Once your new car limit runs out, you can call and get BCR. With GAP, we offer it but it has to be brand new and never titled in anyone's name before and doesn't work if it's a lease. Hope this helps.

 

[BigAirHarper]

In case of Alliant, does the 'time-fuse' apply to the GAP coverage or the deductible?

Just deductible.