GAP Insurance for personal lease through Tesla Finance

[Tielle]

I'm awaiting a delivery date for a M3LR next month. I'm buying it through PCH (first time I've ever leased) over 3 years with Tesla Finance and, to keep overall costs down, am putting down the largest deposit possible (~£15k) so monthly payments are much lower.

Obviously, regular insurance will cover repairs but I'm guessing I need GAP insurance in case of theft/write-off. Has anyone else who's leased had any experience of this? Most GAP insurance I can find, even when it's explicitly designed for PCH will cover remaining monthly payments but only the first £3k of the initial deposit. Whichever way I look at it, I can't see how to avoid being £12k out of pocket if the vehicle's stolen or written off. Even though it'll cost more over the 3-year term, I'm now wondering whether I can alter my lease to put down £3k deposit with higher monthly payments but don't want to lose my car and have to reorder.

As I say, I've never leased before so may be misuderstanding how it works. I realise that insurance is a personal decision based on how much risk you're willing to be exposed to, but any advice would be greatly appreciated!

 

[Billbrown1982]

I'm not too sure about your personal needs, but the GAP insurance i'm getting for my financed M3, has a page specifically designed for you apparently.

Lease & Contract Hire Car GAP Insurance | Use CHG10 for 10% Off | ALA

If you buy from there, use code MSE20 for 20% off the price too.

Moderator comment - keep reading this thread to see if this insurance meets your needs

 

[Tielle]

I'm not too sure about your personal needs, but the GAP insurance i'm getting for my financed M3, has a page specifically designed for you apparently.

Lease & Contract Hire Car GAP Insurance | Use CHG10 for 10% Off | ALA

If you buy from there, use code MSE20 for 20% off the price too.

Thanks for this. I had found that page but, however, you'll see that the deposit cover is limited to £3k. I've put down a £15k deposit so my monthly payments are much lower. It seemed like a good idea at the time but now it seems odd to me that Tesla Finance would offer a deal that leaves you £12k out of pocket if the car is a total loss. If there's no way around it, I'll see if Tesla Finance will let me lower the deposit to £3k and up the monthly payments again. I'll pay more over the term but the risk is obviously eliminated. Thanks for your help.

 

[Billbrown1982]

Thanks for this. I had found that page but, however, you'll see that the deposit cover is limited to £3k. I've put down a £15k deposit so my monthly payments are much lower. It seemed like a good idea at the time but now it seems odd to me that Tesla Finance would offer a deal that leaves you £12k out of pocket if the car is a total loss. If there's no way around it, I'll see if Tesla Finance will let me lower the deposit to £3k and up the monthly payments again. I'll pay more over the term but the risk is obviously eliminated. Thanks for your help.

Ah I see what you mean now. Sorry I only put in a rough estimate to see if it worked ok, but didn't pick up on the large deposit.

Yeah thats definitely frustrating! Hopefully you find a solution around it.

 

[Tielle]

Ah I see what you mean now. Sorry I only put in a rough estimate to see if it worked ok, but didn't pick up on the large deposit.

Yeah thats definitely frustrating! Hopefully you find a solution around it.

Thanks. Now I think about it, it's hopefully not as bad as I initially thought. With a total loss claim, regular insurance would pay out their estimate of the car's worth at that point, and the finance company would probably want a no doubt higher amount plus my remaining monthly payments. But my initial deposit should go towards that so it's not lost. At least that's what i'm hoping!

 

[Billbrown1982]

Thanks. Now I think about it, it's hopefully not as bad as I initially thought. With a total loss claim, regular insurance would pay out their estimate of the car's worth at that point, and the finance company would probably want a no doubt higher amount plus my remaining monthly payments. But my initial deposit should go towards that so it's not lost. At least that's what i'm hoping!

Yeah that make sense but hopefully someone with more experience will chime in.

I "think" you'd be more at risk at the start of your term? As the initial depreciation on the car would be the quickest part and if it got unfortunately written off then you might end up out of pocket?

I'm just spitballing here. Lets wait for a smart cookie

 

[Tielle]

Yeah that make sense but hopefully someone with more experience will chime in.

I "think" you'd be more at risk at the start of your term? As the initial depreciation on the car would be the quickest part and if it got unfortunately written off then you might end up out of pocket?

I'm just spitballing here. Lets wait for a smart cookie

Ha! Me too but I'm assuming, perhaps incorrectly, that if it happened early on, they might actually owe me, given I'd have paid off over half the 3-year total payments up front!

 

[Sabs]

Why don't you reduce the initial payment and keep the money in your own account, or as I am doing in stocks. The figures workout to be the same total whichever way you do it, so you may as well have the money in your account making you money. That way you can take a bit from that £15k each month to make the cost what you want to be, plus if you have an unexpected expense, then the money is there available. *This is not financial advice

 

[Tielle]

Why don't you reduce the initial payment and keep the money in your own account, or as I am doing in stocks. The figures workout to be the same total whichever way you do it, so you may as well have the money in your account making you money. That way you can take a bit from that £15k each month to make the cost what you want to be, plus if you have an unexpected expense, then the money is there available. *This is not financial advice

Thanks, Sabs. Non-advice noted When I plugged the numbers into the calculator on the Tesla website, the overall amount paid over the 3 year term is actually about £1k less as you don't pay interest on the deposit. That's why I went with a bigger deposit.