TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker and becoming a Supporting Member. For more info: Support TMC
Start a Discussionhttps://teslamotorsclub.com/tmc/tags/

GAP Insurance

Discussion in 'Model S' started by NathanielHrnblwr, Jul 18, 2017.

Tags:
  1. NathanielHrnblwr

    Joined:
    Sep 24, 2015
    Messages:
    58
    Location:
    San Diego
    Question on the benefits of GAP insurance -

    I read a long lost thread ages ago on the topic of GAP insurance on TMC that I cannot seem to locate to revisit and refresh my memory. I understand what GAP insurance is and the primary benefit of having it in the event the majority of the purchase is financed and the car is a loss, however someone had brought up another benefit or scenario that I can't remember for the life of me - why they always took GAP insurance option on a luxury vehicle. Since I can't find that thread, I'm posing the question.

    Besides the obvious of covering the different between the insurance payout and the remainder of a loan, what other benefit(s) would GAP insurance offer? Rephrased, what scenario would GAP insurance be valuable to have on a luxury car that would not be apparent to those that typically owned a lower priced vehicle?
     
  2. jareade

    jareade Supporting Member

    Joined:
    Jan 2, 2017
    Messages:
    266
    Location:
    Driving
    The more expensive the car, the greater the amount it depreciates the second you drive it home. If you think of it in percentages, a 15% depreciation on a $30K car is $4,500. On a $100K car, it's $15,000. The gap coverage provides that protection. Of course, on some of these cut-rate 90 deals, that "gap" is a lot smaller to cover.
     
    • Like x 1
  3. MIT_S60

    MIT_S60 Member

    Joined:
    Nov 23, 2016
    Messages:
    240
    Location:
    Orange County, CA
    A luxury vehicle will depreciate significantly faster than a lower priced vehicle, so you're more likely to be be upside down on your loan by a larger amount. Alliant offers GAP for $399 (and includes a few other benefits, such as deductible waivers up to $500 for vehicles you own and insure). You could get GAP through your insurance provider, but most only offer GAP insurance on new cars, which prevents you from changing insurance companies.
     
    • Informative x 1
  4. RichardD

    RichardD Supporting Member

    Joined:
    Feb 6, 2017
    Messages:
    491
    Location:
    Texas
    Texans credit union had the same thing, gap with deductible waiver and some other weird perk i would have to look up, for like 399 as well. Money well spent considering the depreciation on this car is so volatile.

    My .02
     
  5. NathanielHrnblwr

    Joined:
    Sep 24, 2015
    Messages:
    58
    Location:
    San Diego
    I want to say there was some other scenario that made sense. What comes to mind is to use GAP insurance and finance as much as possible vs. no GAP and 20% down payment as risk avoidance in the event of total loss, but I'm not positive. I wish I could find that thread.
     
  6. doubleohwhat

    doubleohwhat Supporting Member

    Joined:
    Sep 1, 2016
    Messages:
    411
    Location:
    Alabama
    I got 1.9% financing from Alliant. At that rate, I'm not pulling out invested funds to pay cash for a car (or anything really). Their GAP coverage for $399 was a no brainer as it offered significant protection and is a small amount compared to what I'll likely earn leaving the funds invested.
     
  7. NathanielHrnblwr

    Joined:
    Sep 24, 2015
    Messages:
    58
    Location:
    San Diego
    That's part of what I'm debating. Finance as much as possible with to 1.49% or put 30k or so down. I'm fighting the feeling of irresponsibility financing most of the purchase vs. a significant down payment and financing the rest. The number suggest financing as much as possible as long as possible @ 1.49%. Cost is ~$4500 over the term vs. investment gain/further liquidity on items that would be more expensive to finance (home improvements, etc.)
     
  8. Pandamoanium

    Pandamoanium Member

    Joined:
    Jul 8, 2016
    Messages:
    376
    Location:
    Colorado
    Seems like a lot of people getting into a Tesla are buying versus leasing. I've noticed a lot of people also do what we do, which is to put a significant down payment usually 25K+.

    With that being said, the Tesla is also the only vehicle I've owned so far that depreciates like it's life goal is to be as straight going down as my other vehicles. Right now the Alliant 0.99% and GAP actually makes sense. For me, I feel like even if I were to put down 25K again, I would be tickling the line of being over/under within 6 months or so. That in of itself makes the GAP worth it, I can put less down and be comfortable with the monthly, all while knowing if I'm upside down within a year I'll be okay.

    This is truly peace of mind in the situations we're in. It may be a move to get the sales and numbers, but at the end of the day we also net a very good benefit.
     
  9. jelloslug

    jelloslug Active Member

    Joined:
    Jul 21, 2015
    Messages:
    2,180
    Location:
    Greenville, SC
    On top of that, the Alliant gap policy also has a deductible reimbursement of $1000.
     
  10. jelloslug

    jelloslug Active Member

    Joined:
    Jul 21, 2015
    Messages:
    2,180
    Location:
    Greenville, SC
    I put 20 something percent down on my Model S and got the gap policy. The rate is so low that I did not want to tie up anymore cash than that but I also wanted to not be in the hole the second I drove it off the lot.
     
  11. patrick40363

    patrick40363 Member

    Joined:
    Mar 25, 2014
    Messages:
    434
    Location:
    Cali
    GAP insurance will be included if you lease through US Bank.
     
  12. Pandamoanium

    Pandamoanium Member

    Joined:
    Jul 8, 2016
    Messages:
    376
    Location:
    Colorado
    I believe the deductible reimbursement is now $500.00 and the $1,000.00 goes towards the financing of a replacement vehicle if need be. But you are absolutely correct, the deductible reimbursement itself pays for it.
     
    • Informative x 1

Share This Page