[No_curebimmer]

Guys, I just got into a brand spanking new 335is, and while the 0.9% financing is awesome, I got talked into buying the gap insurance.

What do you guys think, is it worth it? I see the concept behind the idea, but this is supposed to be a limited BMW (made till 2012 I suppose). Should I keep it? I believe it's approx $18/mo, but I have been told I can cancel it any time...not sure if I'm wasting my money.

Let me know if anyone has it, pros/cons for keeping it, etc

Thanks!

[RacerUnderTheSon]

depends how much you put down. if you put 0 or a small amount down, definitely keep it... it will protect you if something happens to the car, accident, stolen, etc

[cb1111]

It is a very simple calculation that has little to do with the car.

If the car were totaled today, would you be OK with covering the difference between what the insurance pays you and what you owe BMW?

The insurance company will give you "fair market value" that - in the first couple of years of a car's life (in this price category) is about $10k less than what you owe.

[Eights-n-Aces]

Both accurate. Depends on how much you put down and whether you are comfortable with the risk of covering the difference between fair market value and what you owe.

[igom3]

Originally Posted by No_curebimmer

Guys, I just got into a brand spanking new 335is, and while the 0.9% financing is awesome, I got talked into buying the gap insurance.

What do you guys think, is it worth it? I see the concept behind the idea, but this is supposed to be a limited BMW (made till 2012 I suppose). Should I keep it? I believe it's approx $18/mo, but I have been told I can cancel it any time...not sure if I'm wasting my money.

Let me know if anyone has it, pros/cons for keeping it, etc

Thanks!

Buy it from your insurance company for alot less!

[Maestro]

I'll put it another way, if you need gap insurance you can not afford the car.

Dealership came up with this little gem because of people who walk in to buy a new car pay more than the car is worth and the sell them gap since they know they will be underwater as soon as the walk out the door. Some loan companies are now requiring this on low down payment buyers.

I also seen Gap insurance which covers the New car for the first year. If the car is a total lost the insurance covers the difference in the car value and what is would cost to replace new. It just covers the depreciated value of the car

[GTakacs]

Originally Posted by igom3

Buy it from your insurance company for alot less!

+1. My insurance company, Progressive, offers it for about $20/year.

[cb1111]

Originally Posted by Maestro

I'll put it another way, if you need gap insurance you can not afford the car.

Dealership came up with this little gem because of people who walk in to buy a new car pay more than the car is worth and the sell them gap since they know they will be underwater as soon as the walk out the door. Some loan companies are now requiring this on low down payment buyers.

I also seen Gap insurance which covers the New car for the first year. If the car is a total lost the insurance covers the difference in the car value and what is would cost to replace new. It just covers the depreciated value of the car

That's a bit extreme, isn't it.

No down on a 5 year loan for a "well optioned" car is in the $800 range a month.

Popular financial commentators suggest that you should be prepared financially to weather 3-6 months of bills.

The moment you drive out of the dealership you car drops by $10k or more - that is the equivalent of a year's payments.

Can you afford that?

[GTakacs]

Originally Posted by Maestro

I'll put it another way, if you need gap insurance you can not afford the car.

I beg to disagree. When dealers are offering 0.9% you'd be a fool to put any money down on a conventional loan. And since you would be doing a sign and drive it only makes sense to get GAP coverage that way you don't have to pay for the depreciation during the first 3 years while you're upside down on your loan. Whether you want to pay for such insurance is up to you, but at the rate my insurance co. charges it's a no brainer to have it.

I'd also mention that GAP coverage is built into every lease term as with a lease you're always upside down all the way to the very end when you turn in the car.

So I would not say that just because you buy GAP insurance it means you couldn't afford the car in the first place. Now people who lease because they want a lower payment and could not afford the higher payment and therefore lease for the wrong reasons is a completely different story...

[igom3]

It covers car depreciation for first 1-2 years. It depends on how much you put down, your loan agreement interests rate etc. Some of the insurance companies have “guarantied” cost replacement for the first year of your loan. Read your insurance policy or simply call your insurance company

[bavarianboar]

Originally Posted by Maestro

I'll put it another way, if you need gap insurance you can not afford the car.

Dealership came up with this little gem because of people who walk in to buy a new car pay more than the car is worth and the sell them gap since they know they will be underwater as soon as the walk out the door. Some loan companies are now requiring this on low down payment buyers.

I also seen Gap insurance which covers the New car for the first year. If the car is a total lost the insurance covers the difference in the car value and what is would cost to replace new. It just covers the depreciated value of the car

Oh really?

[No_curebimmer]

Thanks for the responses guys! Evidently I'm aware of what GAP insurance stands for, however, I was trying/hoping to bank on the fact that the 'is' is a special car (more so than the 335i) hence it will hold its value better. And to provide concrete data for the helpful posts, the only money I put down were the taxes...

And, as a side soapbox moment, since I do not have 10k lying around just to pay off my car should it be totaled, then I suppose I must not belong to the elite society that some esteemed forum members are fortunate to join. Regardless, I thank all who provided helpful comments - I'll check with Geico on the GAP insurance offers.

[cb1111]

Originally Posted by No_curebimmer

Thanks for the responses guys! Evidently I'm aware of what GAP insurance stands for, however, I was trying/hoping to bank on the fact that the 'is' is a special car (more so than the 335i) hence it will hold its value better. And to provide concrete data for the helpful posts, the only money I put down were the taxes...

And, as a side soapbox moment, since I do not have 10k lying around just to pay off my car should it be totaled, then I suppose I must not belong to the elite society that some esteemed forum members are fortunate to join. Regardless, I thank all who provided helpful comments - I'll check with Geico on the GAP insurance offers.

Like any insurance, the questions isn't always "can you afford it" but "is it worth the risk?"

I could afford the $10k difference, but the $350 for gap insurance was a no brainer for me.

[Skully]

There is no such thing as a special car to an insurance company. They will find a way to give you a low ball value if it get's totaled. Mine did when my motorcycle was stolen a few years ago.

Gap insurance for me is a no brainer but not all gap policies are created equal so read the fine print.

[flyby]

Gap is b.s I totaled my 530i it's the insurances job to pay off the car. Most of the time they will try to save some money and offer you Less than you have to pay to BMW. Don't accept and they will end up paying the car! What sucks is what you put down for the car and what you have paid for it so far you lose it all

[GTakacs]

Originally Posted by flyby

Gap is b.s I totaled my 530i it's the insurances job to pay off the car. Most of the time they will try to save some money and offer you Less than you have to pay to BMW. Don't accept and they will end up paying the car! What sucks is what you put down for the car and what you have paid for it so far you lose it all

You sir clearly have no idea how GAP or insurance works. If you put a substantial amount of money down at the time of purchase you do not need/want GAP. But if you bought with zero down then you probably want to cover yourself for the difference between the depreciated value and the amount you owe on the car.

[Quasimodem]

Originally Posted by Maestro

I'll put it another way, if you need gap insurance you can not afford the car.

Dealership came up with this little gem because of people who walk in to buy a new car pay more than the car is worth and the sell them gap since they know they will be underwater as soon as the walk out the door. Some loan companies are now requiring this on low down payment buyers.

I also seen Gap insurance which covers the New car for the first year. If the car is a total lost the insurance covers the difference in the car value and what is would cost to replace new. It just covers the depreciated value of the car

Huh? Gap insurance covers the difference between what the ins will pay to total the vehicle and what you owe. You mine as well say that "if you need insurance at all (in other words, you can't afford to buy another car if you lose your current car), you can't afford the car."

If you owe $20,000 and the car is worth $15,000 and it gets totaled, your regular insurance will pay the $15,000 and the gap ins will pay $5,000. It's all about money. The gap insurance protects you from a $5k hit, and the regular ins protects you from a $15,000 hit. Yes the cost of the gap insurance should be calculated based on the expected BB value of the car and your expected amount owed on the car, but if it is calculated correctly, it should be no more of a "gimmick" than the regular insurance.

[John 070]

Originally Posted by GTakacs

You sir clearly have no idea how GAP or insurance works. If you put a substantial amount of money down at the time of purchase you do not need/want GAP. But if you bought with zero down then you probably want to cover yourself for the difference between the depreciated value and the amount you owe on the car.

GAP is something that nobody should ever pay. But it was invented by financiers, they will always come up with a way to take your money downtown.

Let's be real, this is not the place to turn for financial advice. There has been advice given that it's dumb to pay off a car. So of course there's going to be advice to the 180, encouraging zero down.

[mithiral67]

First, my insurance automactically includes gap insurance. Check with your insurance company.

Second, I wouldn't consider the IS a limited edition with anymore value (depreciating with the car) than any other options on the car.

[graves4r6]

If you have the hugo neg equity on the car then the Gap insurance is A must!

[andrewket]

Originally Posted by mithiral67

First, my insurance automactically includes gap insurance. Check with your insurance company.

Second, I wouldn't consider the IS a limited edition with anymore value (depreciating with the car) than any other options on the car.

And in fact if you look at the residuals on BMW leases you will see that *BMW finance* believes that after 3 years a 335is = 335 FMV.

A

[AlexH]

Originally Posted by Maestro

I'll put it another way, if you need gap insurance you can not afford the car.

Dealership came up with this little gem because of people who walk in to buy a new car pay more than the car is worth and the sell them gap since they know they will be underwater as soon as the walk out the door. Some loan companies are now requiring this on low down payment buyers.

I also seen Gap insurance which covers the New car for the first year. If the car is a total lost the insurance covers the difference in the car value and what is would cost to replace new. It just covers the depreciated value of the car

Ditto! You only need it when you pay too much for a car. If you got your deal right, you should not worry about not having enough equity to cover the loan balance in an event of a total loss.