GAP loan coverage worth it? - Kia Forum
 
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post #1 of 8 (permalink) Old 08-21-2012, 03:19 PM Thread Starter
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Default GAP loan coverage worth it?

When I bought my 2011 sportage SX I opted to get GAP loan coverage in case the car is totaled/stolen and my insurance wouldn't cover what I owe the bank. It cost me $860. To me I was making a smart decision. Especially with how Kia's could be valued. Anyway, do you all think that's a waste of money? If so, I can get a refund of the remaining GAP fee I paid applied to my loan.

Again, just wanted to get everyone's opinion of this added coverage.

Ps... I'm usually not one to buy any added insurance/benefits when buying a new car. But, since this was a slightly used SX I thought it may be a good idea this time. Anyway, rethinking that now and may get a refund since I assume I'll never end up using this type of protection. Statistically speaking that is...
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post #2 of 8 (permalink) Old 08-21-2012, 05:48 PM
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completely worth it. It's usually veryy cheap. Remember, you're almost always underwater on a loan if it's over 3 years. I would never buy a car without it. You could get creamed at any second with the way people drive . The last thing you want is to owe a couple grand on your totalled car.
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post #3 of 8 (permalink) Old 08-21-2012, 07:58 PM
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And most lenders require GAP unless you have equity in the car. Luckily I didn't need it with the SX because the retail value was over $28k and my loan was only $23k. Otherwise I would have purchased it too.
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post #4 of 8 (permalink) Old 08-22-2012, 09:17 AM
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I don't know what the insurance is like in the US, but up here in Canada some companies offer a "limited waiver of depreciation" essentially offering you full purchase price of you car if it is written off within two years of purchase. Not sure what applies beyond that (my rep told me he added something to mine to ensure I get full loan value or more beyond that?), but it seems like a good deal. If you're going to write if off, do it within the two years...

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post #5 of 8 (permalink) Old 08-22-2012, 12:10 PM
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GAP is absolutley worth it.
Plus some lenders give you a interest discount when you buy it.
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post #6 of 8 (permalink) Old 08-22-2012, 01:47 PM
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Gap coverage is worth it until the point where what you owe on the loan is less than the KBB value of the car (or thereabouts).

If you pay more than 20% down like I do, you'll never need gap coverage.
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post #7 of 8 (permalink) Old 08-23-2012, 02:06 AM Thread Starter
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Thank you all. I will keep the coverage in place. Especially in my situation. I lost a bunch on a trade when I bought this car (hated the EX sportage and said F it, just cut losses and go forward) and had to finance $1000 in "bad debt". So, especially in my case, I need this it seems.

Again, thanks for the info. I do understand that when I pay the loan down enough as Duhtroll states, I can cut the coverage and take a refund at that time if there's a balance left. I just need to owe the bank a decent amount less than KBB value. Totally understand now...
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post #8 of 8 (permalink) Old 08-23-2012, 02:12 AM Thread Starter
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Ps... I always put 20% down too but this is kind of a special/weird situation. I bought a new 2012 EX and in 3 months hated how slow it was etc etc. Traded it to cut losses and sunk some cash (which I had available so not a huge deal there) / got raped on my trade as expected of course. Now a bit upside down so bought GAP trying to make at least one smart decision in this small mess ;-) Glad to know it was indeed a smart move.

I won't bore you with why I bought the EX and not the SX initially. At the time I thought I was being smart by saving a few grand and MPG etc. and went against my gut. Trust, will never do that again... ;-)
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