Gap Insurance - anyone used it ?

[bigmouthmedia]

I'm looking into insurance, and have seen a few mentions in forums and on of 'gap insurance' - I think VW call it Asset Protection.

Has anyone taken it up ? From what I can tell, if you have a prang, the car's a write off and you get back $18,000 on the car for example, but to the finance company it was still worth the $25,000 you paid for it on day one, that you'll have a $7,000 gap to cover to pay out the financier, or just keep paying off a debt until it's gone.

Like to hear thoughts and prices if anyone's done it.

[Maverick]

Better off putting some extra money towards a decent insurance company and go for agreed value. Gap insurance is a waste of time IMO.

[bigmouthmedia]

Hmm....interesting. I'll ask the dealer when i pick up the car, but it's such a wrangle about the whole insurance thing.

For ages I've been pro-AAMI, but now i'm starting to veer towards RACV (former insurer) - they organised Woods in Nunawading (Vic) for a former car i pranged, they did a perfect job - and AAMI ? I keep hearing of a lot of low quality repairs, and even if you did present a quote from Woods, they'd likely go for their own anyway - they 'reserve' the right.

Shame, because they're the cheapest with Rating 1 for life

In terms of agreed, do I put down what I purchased it for on day one for year one ? Or do i suggest it and the company barters to what they believe it should be ? I think i'd rather the peace of mind of getting closer to the car's value than 60% of it later and still having to fix up the finance.

[Corey_R]

Yeah - go with an insurance company that agrees to insure for your FULL purchase price and depreciate from there, that way you won't have any gap

[Laidback]

It's the age old dilema: How can we get away with not paying any more than we have to with insurance. Well if your car is important enough to insure; then why isn't your credit rating impoprtant enough to insure. GAP is a once off payment that will cover you up to 5 years, and it's often less than $200 per year.

Comprehensive Insurance will never cover the payout of a loan. New for old will not cover the break fees that are still owed at the time of 'total loss'. It only covers the value of the car less it's excess.

For the sake of a few extra dollars it's not worth punting against a depreciating car, and depending on the cover chosen, GAP Insurance will pay out your loan and give you extra money to get back on the road.

I'm a finance broker who offers GAP Insurance. Last Year I had a client who only decided to include it at the last minute. A week very early in the morning, on the way to work he fell asleep at the wheel and wrote his car off. Luckily he was ok, and the GAP cover saved him 8K in a week.

I shouldn't be saying this but I can't sell my products cheaper than these guys: www.pomi.com.au

POMI - Peace Of Mind Insurance

I'm including this site because I'd rather people get GAP any which way they can than not have it at all. It's so cheap, beneficial and crucial to ones' credit history that it should be compulsary. It's as important as Comprehensive Insurance.

[gticrazy]

Gap insurance does sound like a good idea - especially if you crash the car in the first few months when you still have a high payout figure

[Jesmol]

Yeah - go with an insurance company that agrees to insure for your FULL purchase price and depreciate from there, that way you won't have any gap

Except if you're leasing a vehicle. This is where gap insurance is important.

If you lease for a 3 year period, it will take at least 18 months for the payout figure to be less than market value on a VW. So if you write it off in that period you will end up with a gap, as the value to payout the lease is basically the balloon payment , plus the remaining lease payments.

[Corey_R]

Except if you're leasing a vehicle. This is where gap insurance is important.

If you lease for a 3 year period, it will take at least 18 months for the payout figure to be less than market value on a VW. So if you write it off in that period you will end up with a gap, as the value to payout the lease is basically the balloon payment , plus the remaining lease payments.

Aah cool, that makes sense. I haven't considered the leasing option

[Maverick]

Hmm....interesting. I'll ask the dealer when i pick up the car, but it's such a wrangle about the whole insurance thing.

For ages I've been pro-AAMI, but now i'm starting to veer towards RACV (former insurer) - they organised Woods in Nunawading (Vic) for a former car i pranged, they did a perfect job - and AAMI ? I keep hearing of a lot of low quality repairs, and even if you did present a quote from Woods, they'd likely go for their own anyway - they 'reserve' the right.

Shame, because they're the cheapest with Rating 1 for life

I liked them when I started using them back in the late 90's but their repair service has gone downhill, they're screwing repairers for more and paying less (hence why no decent repairer does work for AAMI) and they won't allow you to choose the repaired even if the other party was at fault and their insurance company is paying. You can't even offer to pay the difference yourself as they flatly refuse.

As for the repairs... well I've posted about how bad they are, I've spent so much time stuffing around sorting out shoddy AAMI repairs that I'll never use them again.

In terms of agreed, do I put down what I purchased it for on day one for year one ? Or do i suggest it and the company barters to what they believe it should be ? I think i'd rather the peace of mind of getting closer to the car's value than 60% of it later and still having to fix up the finance.

The insurance company has a range for your car that you can use. I choose a figure almost at the top of the range. The accessories are listed on top. I went agree value because I wanted to add on genuine R32 wheels to replace my GTI wheels. The cost difference from Volkswagen is $800 ($100 per wheel extra over GTI and $100 per tyre) but if I added on the wheels at $800 they would only give me $200 if a wheel and tyre were stolen and $800 if all were stolen! So I'd be wasting money using market value. Agreed value means I get the price agreed to plus the payment for the extras

[KWICKS]

Shame, because they're the cheapest with Rating 1 for life

Rating 1 for Life is marketing mumbo jumbo. You get guranteed a maximum discount of 60% (up to 70% with some insurers) but this doesn't mean anything because they still change the base premium they deduct the discount from based on your claims history and demographics annually anyway. 60% off a $1000 premium one year, next year you make a claim and it is 60% off a $1400 premium, and you think that's a good deal?