Gap Insurance?

[Deanna777]

When I want insurance, I talk to my insurance agent not my Can-Am dealer.:dontknow:

:agree: with you 100%. Deanna

 

[sjcpanther]

I would have to say that there would not be too many Spyders sold if the only means were to pay cash. Not many people just have $25K sitting around ready to spend. For those that do, that's awesome. But you are definitely in the minority.

 

[ARtraveler]

The original question was "should I buy GAP insurance?" The thread kind of took a turn from there.

 

[robmorg]

Depends!!

Not my business, but...

I would say that if you have to finance a toy, you can't afford it.

And, at the very least, you really can't afford it if you can't put down enough so that you don't end up owing more than the Spyder is worth.

That's at least six months worth of full coverage just to pay a much smaller amount in the event it is totaled or stolen - not a good deal by any measure I can see.

That COULD be true, but many times it's not. It often depends simply on where you want to put your money and your financial liabilities.

When I bought my Spyder I financed 100% of it, including sales tax and a few farkles, through Scheffield Financial - BRP's loan service. Rate was 2.9% for 24 months. I could afford to pay cash, but I had other expenses going on at the time, and at that rate I chose not to. With a term of just 24 months, you don't stay underwater for long on that loan.

As for down payments, I've often financed cars at very low rates with no down payments. Usually you are "upside down" for the first couple of years, but why would you make a down payment, if you can invest the same money for a higher yield, or simply use it to pay down higher interest obligations.

I agree with you about the "Gap Insurance" in this particular case. As others have said, it's a rip-off, and many regular insurance carriers will offer you the same sort of deal at a much lower cost.

 

[robmorg]

The original question was "should I buy GAP insurance?" The thread kind of took a turn from there.

That questions was answered early on. He SHOULD, but not THAT gap insurance. There are less expensive ways to accomplish the same thing.

 

[MRH]

As for down payments, I've often financed cars at very low rates with no down payments. Usually you are "upside down" for the first couple of years, but why would you make a down payment, if you can invest the same money for a higher yield, or simply use it to pay down higher interest obligations.

Briefly, my answer to your question is "risk". If I wouldn't borrow money to directly invest it, then why would I borrow money to keep money invested? I feels differently, I would agree, but the net effect is the same. When you factor in the possibility of loosing money (the risk), the equation changes.

As to paying down higher interest obligations, it virtually always makes sense to reduce interest rates when possible. The question is if the loan should be taken in the first place, not if the interest on existing debt can be reduced.

These are, of course, my opinions based on my values, experiences and perspectives. As others have pointed out, my perspective on money is very different than the majority of Americans, and I am unusually adverse to being in debt. I also don't personally feel like something is mine until I've completely paid for it. It isn't my place to make decisions for others, and as a business owner I am more than willing to offer whatever methods of payment are in line with the values of my clients, rather than what I choose to do in my personal life. So, please consider what I've written to simply be another perspective to consider. If we all stopped utilizing debt at the same time, the economy would likely collapse. Ironically, I do believe that individually we benefit from that course of action, and that if we as a country slowly stopped accruing debt over a generation or two that we would have a much stronger economy.

 

[ARtraveler]

The whole thread is now moot. The OP has posted a picture of his new RT. :congrats: