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#1
11-12-2009, 11:36 AM
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GAP Protection Required???
Iam planning to buy a 06 X5 CPO at the dealer today.He is quoting me that he can give the car at the price only I take GAP protection coverage.
Iam planning to put down around 5K for the car. He is charging me around 700 for the coverage.Is it required? Your help will be greatly appreciated 
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#2
11-12-2009, 12:26 PM
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GAP Not Necessary
Some finance companies require gap insurance if they are financing the entire amount. But, you have a $5,000 down payment. Find out what is the threshold where gap insurance is not required. I would guess, it is probably 25% of the purchase price.
Some finance companies build it into their package. Two cars ago, I financed my SAAB through GMAC. GAP insurance is included in all GMAC loans. Six months after I took delivery of my car I was in a serious car crash and my SAAB was a total loss. My personal insurance immediately paid out $30K. I still owed about 4K. The GAP insurance covered the 4K. You can also find out what your own auto insurance company would charge for GAP. $700 a year sounds high. Or, is this over the life of the loan?
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#4
11-12-2009, 12:43 PM
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Too funny. I literally did the exact same transaction a month ago (06, CPO, 5K down). I signed a form waiving this coverage. It was similar to declining coverages on a car rental agreement where you "initial here, here, here, and sign". I know for SURE I was able to waive this and I purchased via BMW financial.
Hope this helps. Joe
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#5
11-12-2009, 09:50 PM
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When i bought mine at the start of the new year that was also offered to me and i declined it. I got a great deal on the car and it is insured for the value not the sale price. Try to make sure you are getting a good deal first as it is the dealers job to sell products. Like BMWvoid said if you feel the need get it. Consult your insurance company and see what they think, ultimately if that day was to come they are the ones covering you.
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#6
11-13-2009, 01:00 PM
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I am a manager for a financial institution.I'll tell you what, first GAP is never ever required, you can opt out if you want, but that being said, i fully recommend GAP. Now $700 its a lot of money, i sell my GAP for $250. I advice you to contact a credit union and see how much they charge. Vehicle prices have move up and down too much lately, thats why is a good idea to have GAP, just for the peace of mine, but not for $700. You can actually add GAP through your auto insurance, and in some cases thats cheaper. Last advice, dont throw your money away for down payment. Vehicle lose value and so will your down payment dust away. save that money for some mods instead.
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