Do I need to buy a gap insurance for my prius?

gyudaddy · 07-10-2006, 09:10 AM

Hi,
I don't know where to post insurance related issue. Hope this is the right place.

I'm finishing my loan today and like to know about the gap insurance. As far as insurance goes, I have $250 deductable and max coverage of everything. When I got preapproved for my car loan, my credit union told me to consider buying a gap insurance. I know Prius' used value is not a whole lot different from a new car's value, and if I understand right, in any worst case (totalling my car), my insurance company will pay for the current used value of 06 prius.

Gap insurance sounds good, but to get prius, I really had to give up something I got used, so I don't want to buy it. Do you guys think I need to buy a gapinsurance? (I paid about 25% for a downpayment.) Can you guys help me?

EricGo · 07-10-2006, 10:03 AM

I don't understand your second paragraph. Gap insurance is usually bought by people who are 'upside-down' on their loan, meaning the totaled value of the car is less than owed. Gap insurance would cover that difference. Your down-payment puts you out of that category, so gap insurance has NO value to you, today.

There is a wrinkle to this, though. Lets say you own the car for awhile before the big accident, and collect a couple of dings along the way. When your car is appraised, those dings will reduce your car's value -- perhaps to below what you owe. That difference would be paid by gap insurance.

Would I buy it ? Hell no. Do I think it is reasonable for you to buy it ? Very doubtful.

gyudaddy · 07-10-2006, 10:09 AM

Thanks EricGo.
I am leaning towards to what you said. Since I paid 20%+ as a downpayment, I don't think i'll get upside down. Sorry that I was not clear enough but you got my point.

galaxee · 07-10-2006, 11:23 AM

i agree, there's no point to gap insurance- especially if you put down a good sized down payment on the car.

we put nothing down and still only were upside down for about 8 months (with a 6 month payment deferment!) so i don't think you have anything to worry about.

subarutoo · 07-10-2006, 03:55 PM

I've never heard of gap insurance in 40 years of driving. It sounds like a way to line Insurance companies' pockets. I have bought extended warranties, and gotten my $ worth from them, but gap insurance? No.

gyudaddy · 07-10-2006, 04:03 PM

Thank you for all the replies. I just finished my loan paperwork, and I didn't buy gap insurance. I'm glad everyone in PC is backig each other up. For the extended warranty, I'll probably purchase here.

Jennjay · 07-10-2006, 05:35 PM

Just to add my 2 cents. I did take out gap insurance, it was offered to me by both my credit union and my insurance company. I took it out through my insurance company ( Amica Mutual- great company, always highest rated by Consumer Reports)- it cost less than $25.00 for the whole YEAR ( not a typo - the whole year)

gyudaddy · 07-10-2006, 05:54 PM

Wow $25 would be a nice deal. The cheapest I got offered was around $300,which is why I didn't take. My insurance co. is GEICO, which doesn't offer the gap insurance. I start thinking that I'm not really saving a whole lot using GEICO. Besides, when somebody bumped my car last time, GEICO told me to solve the problem on my own. I may look for another insurance co.

EricGo · 07-10-2006, 07:24 PM

<div class='quotetop'>QUOTE(Jennjay @ Jul 10 2006, 05:35 PM) [snapback]284079[/snapback]</div>

Quote:

Just to add my 2 cents. I did take out gap insurance, it was offered to me by both my credit union and my insurance company. I took it out through my insurance company ( Amica Mutual- great company, always highest rated by Consumer Reports)- it cost less than $25.00 for the whole YEAR ( not a typo - the whole year)
[/b]

That would be $25 wasted every year in the OP's case because he is not upside-down on his loan now, and will in all likelihood never be.

The entire notion of gap insurance is silly in today's loan environment in the US. People with upside-down loans simply roll the debt into their next car purchase as a matter of course. OP put down ~ 20%, so he is not even *close* to belonging to the financialy foolish group who are the somewhat legitimate prey of gap insurance: those buying expensive consumer goods on debt without personal financial reserves *and* lousy credit.

DaveOrgans · 07-10-2006, 10:53 PM

I have gap insurance on my car because it only cost $250.00 for the entire 84 month loan, and because, the value of a 2006 Prius is likely to take a big dip when the 2009 "100 MPG" Prius hits the streets. Thats only 3 years away.

07-10-2006, 09:10 AM	#1
gyudaddy Join Date: Apr 2006 Location: Manhattan, KS Posts: 36 My Car: Package: Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 0	Hi, I don't know where to post insurance related issue. Hope this is the right place. I'm finishing my loan today and like to know about the gap insurance. As far as insurance goes, I have $250 deductable and max coverage of everything. When I got preapproved for my car loan, my credit union told me to consider buying a gap insurance. I know Prius' used value is not a whole lot different from a new car's value, and if I understand right, in any worst case (totalling my car), my insurance company will pay for the current used value of 06 prius. Gap insurance sounds good, but to get prius, I really had to give up something I got used, so I don't want to buy it. Do you guys think I need to buy a gapinsurance? (I paid about 25% for a downpayment.) Can you guys help me? __________________ 2006 Barcelona Red #4 delivered on July 8, 2006 3M Clear Bra, Side Mouldings, Mud Flaps, Rear Bumper Protector

07-10-2006, 10:03 AM	#2
EricGo Three cats, one Prius, and assorted humans Join Date: Apr 2005 Location: Albuquerque, NM (SouthWest US) Posts: 1,810 My Car: Package: Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 0	I don't understand your second paragraph. Gap insurance is usually bought by people who are 'upside-down' on their loan, meaning the totaled value of the car is less than owed. Gap insurance would cover that difference. Your down-payment puts you out of that category, so gap insurance has NO value to you, today. There is a wrinkle to this, though. Lets say you own the car for awhile before the big accident, and collect a couple of dings along the way. When your car is appraised, those dings will reduce your car's value -- perhaps to below what you owe. That difference would be paid by gap insurance. Would I buy it ? Hell no. Do I think it is reasonable for you to buy it ? Very doubtful. __________________ R2-E2: 2004 Prius, 37K miles, lifetime MPG 57.1 as of 8/2006. Rolling 12 month average: 61.05

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07-10-2006, 10:09 AM	#3
gyudaddy Join Date: Apr 2006 Location: Manhattan, KS Posts: 36 My Car: Package: Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 0	Thanks EricGo. I am leaning towards to what you said. Since I paid 20%+ as a downpayment, I don't think i'll get upside down. Sorry that I was not clear enough but you got my point.

07-10-2006, 11:23 AM	#4
galaxee running WOT until out of fuel Join Date: Mar 2005 Location: central NC/ western WI Posts: 9,081 My Car: 2005 Prius Package: #5 Nominated 5 Times in 3 Posts TOTM Awards: 0 Friends: 21	i agree, there's no point to gap insurance- especially if you put down a good sized down payment on the car. we put nothing down and still only were upside down for about 8 months (with a 6 month payment deferment!) so i don't think you have anything to worry about.

07-10-2006, 03:55 PM	#5
subarutoo Senior Member Join Date: Jan 2006 Location: Chatsworth, CA Posts: 1,067 My Car: 2006 Prius Package: #6 Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 0	I've never heard of gap insurance in 40 years of driving. It sounds like a way to line Insurance companies' pockets. I have bought extended warranties, and gotten my $ worth from them, but gap insurance? No.

07-10-2006, 04:03 PM	#6
gyudaddy Join Date: Apr 2006 Location: Manhattan, KS Posts: 36 My Car: Package: Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 0	Thank you for all the replies. I just finished my loan paperwork, and I didn't buy gap insurance. I'm glad everyone in PC is backig each other up. For the extended warranty, I'll probably purchase here.

07-10-2006, 05:35 PM	#7
Jennjay Senior Member Join Date: Oct 2005 Location: Fort Myers, FL Posts: 142 My Car: 2008 Prius Package: #6 Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 1	Just to add my 2 cents. I did take out gap insurance, it was offered to me by both my credit union and my insurance company. I took it out through my insurance company ( Amica Mutual- great company, always highest rated by Consumer Reports)- it cost less than $25.00 for the whole YEAR ( not a typo - the whole year)

07-10-2006, 05:54 PM	#8
gyudaddy Join Date: Apr 2006 Location: Manhattan, KS Posts: 36 My Car: Package: Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 0	Wow $25 would be a nice deal. The cheapest I got offered was around $300,which is why I didn't take. My insurance co. is GEICO, which doesn't offer the gap insurance. I start thinking that I'm not really saving a whole lot using GEICO. Besides, when somebody bumped my car last time, GEICO told me to solve the problem on my own. I may look for another insurance co.

07-10-2006, 10:53 PM	#10
DaveOrgans Join Date: Apr 2006 Posts: 72 My Car: Package: Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 0	I have gap insurance on my car because it only cost $250.00 for the entire 84 month loan, and because, the value of a 2006 Prius is likely to take a big dip when the 2009 "100 MPG" Prius hits the streets. Thats only 3 years away.