GAP Insurance? Extended Warranty?

[Flatbroke1]

I am looking at buying a used 2008 HHR with 27000 miles @ 12998. They dealer is wanting to sell me GAP insurance and extended warranty. (The vehicle already has the GM 5 year/100,000 mile warranty). The finance manager says the GAP is $180 for the 60 month loan term and the warranty is $1240 for the 60 month term. Are these required by J.P., Morgan/Chase? Are these a good deal?

[TheExpert]

Neither is required by a lender, but the GA P is well worth it.

[Flamingo]

Extended warranties on vehicles are usually a waste of money and you will be financing that extra almost $1300 in your financing for the vehicle. What is your deductable to pay if you have to take the vehicle in for repairs? Also, your 100,000 mile warranty already on the vehicle would probably cover you for the same items that are in the extended warranty. Dealerships make most of their money from selling the extended warranties and other non-necessary items (undercoating, seat protection, etc.) after you agree to purchase a car. None of it is reequired to get the loan and almost always is a waste of money that is included in the financing of the vehicle.

[AlmostAmos]

I would get the GAP but not the warranty. All of the major manufacturers give you the option of purchasing a warranty later - but before the initial bumper-to-bumper warranty is up. This is usually what we do IF we think it is going to be worth it (ie we're keeping the car). And, the good thing about doing it like this - you don't pay interest on the price of the warranty. For example, Ford has 0% financing on their warranties with no credit check required. You take the warranty price, divide it by 12 or 18 months & pay.

[Pandora]

agree with the others on GAP... its a lifesaver especially if you owe on a car thats totaled. I know the other thing we always get is the "death benefit" - that way if one of us dies before the car (or house) is paid off - its paid in full upon death (mortgage protection life insurance / mortgage cancellation insurance) - and the life insurance benefits can go towards something different.

[backtoschool]

You can get GAP insurance directly from your auto insurance company. This will cost half of what the dealer will charge you for the insurance. Dealer's have a very high mark up and profit on GAP insurance, so check with your auto insurance company to see what they will charge you for adding GAP insurance to your policy when you buy the new car.

[mrskal]

I agree get GAP insurance. My brother's car got totaled by the neighbor kid. My brothers car was parked in the driveway. He owed $6000 more than it was worth and had to pay it. I never even heard of GAP insurance before that. I like the idea of getting it from the insurance company, I am going to look into that on my next car.

[wnguyen]

Pardon my ignorance but what's GAP insurance?

[tobee43]

Pardon my ignorance but what's GAP insurance?

Gap insurance is really for an auto...so i have no idea why the term is being used....it does not apply to homeowners GAP of coverage due to foreclosure.

the people that are squatting in a foreclosed house what to get insurance??? i know there is some company that does some type of coverage for this situation, however, i'd be hard pressed to see whether anyone has been successful with a claim. although i would invite anyone to share the experience.

the bank covers the house while in foreclosure...after all....the bank does not want to lose the house to vandalism or fire etc. just like the taxes...if the bank does not pay the taxes the house goes up for sale on a tax lien...and once again, the bank does not want to lose the house USUALLY over a tax lien...hench, the bank pays both the homeowners insurance and taxes....

when one is staying in the house and awaiting the 90 day sheriff's sale people are looking to insure the contents of the house while they await eviction...

[wnguyen]

So these two are 2 totally different things and I just happen to know nothing about them. Lucky me.

[Pandora]

Gap insurance is really for an auto...so i have no idea why the term is being used....it does not apply to homeowners GAP of coverage due to foreclosure.

Tobee... I just mentioned getting the mortgage ins "death benefit" but I wasnt referring to anything with foreclosure proceedings ;)

Just figured I would throw it into the mix that along with GAP for auto - there is also a payable upon death type of insurance you can obtain on a new vehicle - as well as on your home. Figured it applied in a strange way

[LSUTiger32]

That's actually a great price for GAP. Defintely check with your auto insurer but read their fine print. Sometimes it's not true GAP coverage. I've never paid less than $500 for GAP so $180 is a great deal to me. Then again, maybe it is because the car is used. I don't owe anything on my car so I don't have GAP currently.

[tobee43]

Tobee... I just mentioned getting the mortgage ins "death benefit" but I wasnt referring to anything with foreclosure proceedings ;)

Just figured I would throw it into the mix that along with GAP for auto - there is also a payable upon death type of insurance you can obtain on a new vehicle - as well as on your home. Figured it applied in a strange way

yes, i think it does...

but pandora....do you know...can you cover the contents of your surrendered house if your a squatter? i'm mean it's not your house, you gave it up...i understand why people stay to be able to get enough money to leave. but i can't see any legitimate insurance company insuring the contents of a place that you are not suppose to be in??

now...don't get me wrong....i would stay as long as i could...and actually we are somewhat sorry that we didn't...we left upon weeks of rec'ing the foreclosure summons. we had 30 days to answer the summons or they said get out....we got out!!

i do know via our escrow account that our insurance was paid up for the entire year....however, upon our homeowners insurance company finding out we vacated the premises they immediately dropped the homeowners. frankly, they hated our bank...and even commented on how awful they were...to say the least we were shocked when they said we are sending YOU the refund on the homeowners insurance for the year...i said how can you do that, the bank paid you...the insurance rep said yes, with YOUR money and besides since we came from a deficiency state...we were going to be charged back in the foreclosure fees anyway...

ummmmmmmm i thought....ok...i'll take the refund.

in this situation these people are still in the house so i understand their situation....however, like i said, i'm just hard pressed to believe they can be ...i don't want say ..."legally" insured...but just for a lack of a better word...it's puzzling to me.

[tobee43]

So these two are 2 totally different things and I just happen to know nothing about them. Lucky me.

that's why i'm confused....i just thought GAP insurance applied to autos....but me too...i know nothing about them, but i'm trying to learn..

[backtoschool]

You could probably get some sort of personal property insurance if you are squatting in a foreclosed house, but I think you would have a difficult time collecting on a claim, and I think the cost of the insurance would be very high. Insurer's would probably have some sort of clause that checked for things like foreclosure of the property you are living in, etc. One of the main factor's in insurance modeling is financial hardship and fraud. That is why insurance rates are so much higher for people with bad credit. Insurer's have created underwriting models that assume that people with bad credit are going to file claims more and commit more insurance fraud. We all know that this is discriminatory and most people who file bk have no intention of committing insurance fraud, but I am sure those same insurance models would apply to people squatting temporarily in a house that has been foreclosed on.

GAP insurance is just for new cars. It has to be purchased at the time you purchase the car. It covers the amount you are underwater on the car, if your car is totaled before you pay it off. It used to be the case that GAP insurance could only be purchased from the auto dealer at the time of purchase, and only if you were financing the car through them, but now you can purchase GAP insurance from your auto insurance company. Not all auto insurance companies offer it though. AAA does. I got my GAP insurance from them and it was less than half of what the dealer would have charged me.