Gap insurance?

[torifile]

Right. But people above were posting questions like “why would you get gap insurance when the used car sells for more than the new one.”

Assuming you kept the vehicle after an accident and tried to sell it to settle any remaining loan good luck trying to get top dollar for a salvaged or totaled vehicle. What I’m saying is it’s ridiculous to think just because it’s a Tesla it’s worth it’s weight in gold, regardless of the condition. If the car is totaled and you don’t have gap but do have a big loan, you’re cutting a check…

I see the misunderstanding. When your car is totaled, the pay out amount is based on a variety of things. One of those things, and what you should always try to use, is how much used cars in similar condition to your car pre-accident are selling for.

Right now, the value of those is so high, I don’t think there’s a chance anyone would be upside down on a loan (unless they had a trade with negative equity). So gap insurance is useless.

My assumption was that the car is totaled and someone thought the gap insurance would be helpful. Since gap insurance is only for totaled cars, I didn’t think it was necessary to specify. More clear?

 

[Trip McNealy]

In some states and/or finance conditions (I could be wrong), GAP insurance is required to finalize the loan since the vehicle is used as collateral. I remember having to mail a copy of my auto insurance to my credit union that stated I had adequate collision, comp, and GAP on my Model Y. For the latter proof I think it was labeled as "loss/payee clause" on my auto policy.

 

[Cobe]

Not sure if you got an answer to your question but I'm in the exact same situation. Financed through USAA and insured with State Farm. I'm paying 5k less for my car than currently priced which is a start. I've always financed though NFCU and got gap insurance for $200 bucks. USAA rates beat NFCU so I went with them this time. Not sure where/how to get gap now or if it's even worth the trouble given the current price.

We pay our cars off early but I'll be making normal payments on the Y for about 8 months at least.

I am with USAA as well. They offer "Car Replacement Assistance" If your vehicle is declared a total loss, they'll pay you an additional 20% of actual cash value. Does not cost much in premiums. I see some Teslas totaled with what appears to be less-than-expected damage. I am thinking the large castings approach may drive more "totaled" decisions on this vehicle design.

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[house9]

Gap insurance is costing me a whopping $36 extra a year, going to keep it until the principle on my loan gets much lower.

 

[thecavalry]

In some states and/or finance conditions (I could be wrong), GAP insurance is required to finalize the loan since the vehicle is used as collateral. I remember having to mail a copy of my auto insurance to my credit union that stated I had adequate collision, comp, and GAP on my Model Y. For the latter proof I think it was labeled as "loss/payee clause" on my auto policy.

There are zero states that require gap insurance. But you better believe dealerships will try to sell you an overpriced policy at signing time.

And it is very rare that a lender could require gap coverage on a vehicle purchase. It is optional, 999 times out of 1000, even though it may not be framed that way to you.

Loss payee is on every insurance policy, it designates who gets paid first in the event of a loss.

 

[torifile]

Gap insurance is costing me a whopping $36 extra a year, going to keep it until the principle on my loan gets much lower.

Think it’s cheap because people are using it and it’s a great bargain? Nope. The policies are cheap because it’s essentially free money for insurance companies, especially now when they likely don’t need to pay out anything in total loss claims.

Used cars are very expensive so the threshold for declaring a car a total loss is higher + the used car market is bonkers meaning these gap policies aren’t needed at all. But if you want to throw your money away…

 

[Trip McNealy]

There are zero states that require gap insurance. But you better believe dealerships will try to sell you an overpriced policy at signing time.

And it is very rare that a lender could require gap coverage on a vehicle purchase. It is optional, 999 times out of 1000, even though it may not be framed that way to you.

Loss payee is on every insurance policy, it designates who gets paid first in the event of a loss.

Ah, ok thank you for that clarification! I definitely know at the least, my CU required the comp and collision minimums. For me personally, the GAP was piece of mind. It cost me an extra $54 for the whole year.

 

[cfbackrow]

DCU offered me GAP insurance ...I was going to say no but for less than $5 a month I took it for piece of mind

 

[TomServo]

I have a similar question but it's directed at tesla's new Insurance offering. Does anyone know if Tesla offers Gap Insurance?

 

[house9]

I have a similar question but it's directed at tesla's new Insurance offering. Does anyone know if Tesla offers Gap Insurance?

They do in California, might differ by state?

 

[Hiline]

This thread taught me a lot about Gap insurance. Thank you to everyone who contributed. Given my order price is way below retail price, Gap insurance is not worth it for me at the moment. I may revisit this later though.