LOOKING TO BUY NEED HELP

[ARtraveler]

Things I do not buy when purchasing a new vehicle:

GAP Insurance, Credit Life Insurance, Extended warranties--I do take the free ones if offered. All of these are overpriced and if you finance them you will end up paying way more.

The last three I purchased were about 25% off of MSRP (and THEN the trade came off) which was a bit better than blue book. No GAP insurance needed as the bike was "right side up." On one deal, the bank sent me a GAP insurance offer a couple months after my deal. I wrote them back--FOR WHAT?

I love telling the finance person--"I don't need GAP or Credit Life--that is YOUR problem if I crash it or die." :roflblack::roflblack:

 

[Bob Denman]

I love telling the finance person--"I don't need GAP or Credit Life--that is YOUR problem if I crash it or die." :roflblack::roflblack:

When you say it: does it make their lower lip start to quiver? :shocked:

 

[johnsimion]

Some offer replacement cost insurance. Though higher of course it would be the same as the GAP insurance :dontknow:seeing as it covers it all...

Excellent advice -- this is better than GAP insurance. GAP insurance only covers the difference between what the actual value of what your vehicle is worth and what you owe, so you don't keep owing money on a vehicle that's a total loss. That primarily benefits the bank -- it doesn't get you a new vehicle. Replacement cost insurance depends on the policy but one definition is "the cost to replace the property with other property of comparable material and quality." To take an extreme example of how this could work, say you paid $20K for a new Spyder and financed $19K. The minute you take possession, it becomes a used Spyder and the actual value drops to $18K. You drive it off the lot and immediately crash. GAP insurance would reimburse you $1,000 to make up the difference between "actual value" ($18K) and what you owe ($19K). Replacement cost coverage would get you a new Spyder since that's the only thing that's comparable. Another issue here is that you wouldn't have to wrangle with the insurance company about what is the "actual value."

 

[ARtraveler]

When you say it: does it make their lower lip start to quiver? :shocked:

Nope. We usually have a bit of a laugh and move on with the transaction. :yes:

 

[JerryB]

Hi crazy,

Re: whats a loan

That's what I say. I bought my first motor vehicle in 1954 & have never financed any from then to now.

IMO never be upside down on a vehicle.

Jerry Baumchen

PS) I just got a quote on my renewal from Progressive; over a 50% increase from last year with zilch in claims. She said it was due to the zip code that I live in. GEICO just quoted 35% less than last year's policy. Guess who I will go with.

 

[Bob Denman]

:clap::congrats: :thumbup:

 

[ofdave]

Excellent advice -- this is better than GAP insurance. GAP insurance only covers the difference between what the actual value of what your vehicle is worth and what you owe, so you don't keep owing money on a vehicle that's a total loss. That primarily benefits the bank -- it doesn't get you a new vehicle. Replacement cost insurance depends on the policy but one definition is "the cost to replace the property with other property of comparable material and quality." To take an extreme example of how this could work, say you paid $20K for a new Spyder and financed $19K. The minute you take possession, it becomes a used Spyder and the actual value drops to $18K. You drive it off the lot and immediately crash. GAP insurance would reimburse you $1,000 to make up the difference between "actual value" ($18K) and what you owe ($19K). Replacement cost coverage would get you a new Spyder since that's the only thing that's comparable. Another issue here is that you wouldn't have to wrangle with the insurance company about what is the "actual value."

both have their place.
Replacement cost insurance is not usually available on older vehicles.
As noted above, GAP covers the difference between what you owe on a loan or lease and the value of the bike. If you owe 20 thousand and the totaled bike in worth 15 thousand, the GAP covers the 5K difference above the insurance that is paid out for the totaled bike (15K). Thus you are not making loan payments on the 5K balance. The use of GAP is most commonly used with leasing a vehicle. It actually benefits you more than the bank because the loan balance is paid by the insurance.
A decent explanation here: https://www.thetruthaboutinsurance.com/new-car-replacement-insurance-vs-gap-insurance/
and here: https://www.trustedchoice.com/car-insurance/auto-coverage-types/gap/
and here: https://www.nerdwallet.com/blog/insurance/new-car-replacement-car-insurance/
I know people who have had their butts saved by having GAP.
I also know people who paid a few thousand in loan payments on a totaled car because the insurance pay out was less than the loan amount. How would a year or so of loan payments on a vehicle in a scrap yard make you feel?

 

[gnorthern]

Your post had me re-reading the OP's post, and my reply. You could be right, as you might not be able to finance with one company, and buy GAP from another.

I'm getting the impression it varies by state. New York sounds different from Oregon.

 

[gnorthern]

both have their place.
Replacement cost insurance is not usually available on older vehicles.
As noted above, GAP covers the difference between what you owe on a loan or lease and the value of the bike. If you owe 20 thousand and the totaled bike in worth 15 thousand, the GAP covers the 5K difference above the insurance that is paid out for the totaled bike (15K). Thus you are not making loan payments on the 5K balance. The use of GAP is most commonly used with leasing a vehicle. It actually benefits you more than the bank because the loan balance is paid by the insurance.
A decent explanation here: https://www.thetruthaboutinsurance.com/new-car-replacement-insurance-vs-gap-insurance/
and here: https://www.trustedchoice.com/car-insurance/auto-coverage-types/gap/
and here: https://www.nerdwallet.com/blog/insurance/new-car-replacement-car-insurance/
I know people who have had their butts saved by having GAP.
I also know people who paid a few thousand in loan payments on a totaled car because the insurance pay out was less than the loan amount. How would a year or so of loan payments on a vehicle in a scrap yard make you feel?

If my intention was to keep riding I would feel fine. I had a car totaled and my daughter's car stolen, and in both cases the pay out was plenty to replace it.