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  #13  
Old 04-01-2014, 07:11 AM
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Re: To Gap or not to Gap? Insuring your purchase...

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Originally Posted by peckmv View Post
If you total a new vehicle then chances are you didn't survive to collect any gap insurance.
With that said, A lot of people never think about the many scenarios in which a vehicle could be totaled. You have to consider theft, flooding, fire etc. With as complex newer vehicles are and the high cost of labor it wouldn't really take that much to total a vehicle. It's cheap insurance and I don't know to many people who finance a vehicle that aren't upside down in the first couple of years due to depreciation.
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  #14  
Old 04-01-2014, 11:45 AM
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Re: To Gap or not to Gap? Insuring your purchase...

I don't know the dealer's price yet, but right now my current insurance told me I could add it to the policy for an extra $120 a year for as long as I wanted it. $120 is a very cheap amount to pay for peace of mind. I think I am going to do it.
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  #15  
Old 04-01-2014, 11:55 AM
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Re: To Gap or not to Gap? Insuring your purchase...

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Originally Posted by 2014GC View Post
With that said, A lot of people never think about the many scenarios in which a vehicle could be totaled. You have to consider theft, flooding, fire etc. With as complex newer vehicles are and the high cost of labor it wouldn't really take that much to total a vehicle. It's cheap insurance and I don't know to many people who finance a vehicle that aren't upside down in the first couple of years due to depreciation.
While I agree with you that gap or vehicle replacement insurance may be "worth it" to some people, the bottom line on insurance is you insure for things you can not pay for out of pocket. I dare say, most people that pay cash (no financing) are in the same position as on a financed vehicle and don't get (at least I never have) the gap insurance fear sales pitch.

If it is a concern, then going through your own auto policy or independent insurance agent will be probably be the cheapest. Plus, if you go through your own auto policy, there will be no disagreement among insurers.
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Old 04-01-2014, 01:27 PM
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Re: To Gap or not to Gap? Insuring your purchase...

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Originally Posted by Dan JGC View Post
While I agree with you that gap or vehicle replacement insurance may be "worth it" to some people, the bottom line on insurance is you insure for things you can not pay for out of pocket. I dare say, most people that pay cash (no financing) are in the same position as on a financed vehicle and don't get (at least I never have) the gap insurance fear sales pitch.

If it is a concern, then going through your own auto policy or independent insurance agent will be probably be the cheapest. Plus, if you go through your own auto policy, there will be no disagreement among insurers.
Or would rather not pay for out of pocket.

If you are earning money (hopefully all are) with your money, the cost of insurance is not only covering the money you already have, but it's future earnings.

I could have paid cash for my Jeep. But the money I have invested is earning more than the interest rate. It's not a big loan as my trade in covered most of it.

In either case, insurance or financing, if you go based entirely on what you can pay, you might be hurting yourself financially.


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Old 04-01-2014, 01:52 PM
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Re: To Gap or not to Gap? Insuring your purchase...

^^^

True - or rather not pay. But the whole point of insurance is the premiums are far more than the expected outlay. It has to be, or insurance companies would be out of business overnight.

It comes down to risk and one's tolerance for risk....the fear of loss is a powerful marketing tool.
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  #18  
Old 04-01-2014, 02:57 PM
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Re: To Gap or not to Gap? Insuring your purchase...

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Originally Posted by bill_de View Post
Or would rather not pay for out of pocket.

If you are earning money (hopefully all are) with your money, the cost of insurance is not only covering the money you already have, but it's future earnings.

I could have paid cash for my Jeep. But the money I have invested is earning more than the interest rate. It's not a big loan as my trade in covered most of it.

In either case, insurance or financing, if you go based entirely on what you can pay, you might be hurting yourself financially.


---
Agreed on the don't want to pay for.

Another situation would be where you can't deduct any of the losses to get even a pittance back, so you bet you WILL have a claim, and the insurance company bets you won't. They make a profit just like casinos do... all in the volume and numbers.


If you are a sore loser, you could start cruising canyons with loose rocks, parking under old trees in wind storms, etc.

The money opportunity argument works only if you realistically could, and actually do, invest the money elsewhere and genuinely make a profit higher than the interest you pay on the loan.
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