Gap Insurance

[Redhot2474]

Any one here have gap Insurance? Since these cars took such a nose dive I’m now certain I owe much $ than the car is worth(probably about 20-25k). I made the decision to at end of 2023 to finance the whole cost of car as rate I was offered was excellent, so I figured I’d keep my cash and take the loan. I just called my credit union to see how much it would be to add it. Might be a good idea for others in same situation.

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[Kief]

My PFS lease includes gap. I just called the other day to double check

 

[KLHubb]

What's gap insurance?

 

[Redhot2474]

What's gap insurance?

The delta between value and what you owe on loan . I’m assuming my 23 GTS is worth 90-110k, my loan value is 125k. If I totaled car, insurance company would give me book value , I’d be in hole 25k or so - gap would Insure the difference so there’s minimal to no out of pocket at that point. It’s never a problem until there’s a problem

 

[KLHubb]

Thanks....I have a Porsche 84 month extended warrantee, and will check to see if gap insurance is included in that policy....I plan to check my regular insurance policy as well.

 

[Cherryjock]

Any one here have gap Insurance? Since these cars took such a nose dive I’m now certain I owe much $ than the car is worth(probably about 20-25k). I made the decision to at end of 2023 to finance the whole cost of car as rate I was offered was excellent, so I figured I’d keep my cash and take the loan. I just called my credit union to see how much it would be to add it. Might be a good idea for others in same situation.

I stopped wondering if I should have it when sales of GAP insurance were suspended here recently. UK policies were not providing fair value.
'only 6% of the amount customers pay in premiums for GAP insurance is paid out in claims'

https://www.fca.org.uk/news/press-r...s typically sold,fair value to some consumers.

 

[BigBob]

I stopped wondering if I should have it when sales of GAP insurance were suspended here recently. UK policies were not providing fair value.
'only 6% of the amount customers pay in premiums for GAP insurance is paid out in claims'

https://www.fca.org.uk/news/press-releases/gap-insurers-agree-suspend-sales-following-fca-concerns-over-fair-value#:~:text=GAP insurance is typically sold,fair value to some consumers.

Interesting link, thanks.

So, is the FCA saying the policies are too expensive ( ie the insurers are taking too big a margin), or that they don’t pay out when they should do?

I think mine was about £300-400 for 4 years from memory. I didn’t think that was too bad, assuming it’s actually worth something.

first time I’ve ever used the product.

 

[Fish Fingers]

Interesting link, thanks.

So, is the FCA saying the policies are too expensive ( ie the insurers are taking too big a margin), or that they don’t pay out when they should do?

I think mine was about £300-400 for 4 years from memory. I didn’t think that was too bad, assuming it’s actually worth something.

first time I’ve ever used the product.

Its all embroiled in the new FCA 'Consumer Duty - fair value' rules. Well intentioned but deeply flawed imo.

That link seems to suggest that historically companies have made too much profit and paid a lot of commission with GAP.

'Historically' is the key word here.

The banks financial resilience wasn't an issue until the financial crisis. And then it was stable door, horse bolted.

Likewise, you could argue that GAP has never been really needed until used car prices started to plummet (now - especially with a Taycan!!).

Just when the FCA effectively banned GAP.

The FCA have a history of ever increasing bureaucracy but miss the real threats until it's too late.
This may be another occasion.

As the original poster pointed out, now may be the one time GAP is needed for high levels of finance.

 

[violuma]

the FCA effectively banned GAP.

Insurance Times reports that things may have thawed out a bit fairly recently on that front.

 

[W1NGE]

Any one here have gap Insurance? Since these cars took such a nose dive I’m now certain I owe much $ than the car is worth(probably about 20-25k). I made the decision to at end of 2023 to finance the whole cost of car as rate I was offered was excellent, so I figured I’d keep my cash and take the loan. I just called my credit union to see how much it would be to add it. Might be a good idea for others in same situation.

Isn't GAP just for insurance claim / offset to return value to original purchase price rather than a vehicle to protect from financing?

May be different in US.

 

[BigBob]

Isn't GAP just for insurance claim / offset to return value to original purchase price rather than a vehicle to protect from financing?

May be different in US.

That's what mine is "Back to invoice GAP"

Just had a look at my policy, only has a £50k maximum benefit. I guess Taycan's weren't cratering when i took that out!

 

[Redhot2474]

Thanks....I have a Porsche 84 month extended warrantee, and will check to see if gap insurance is included in that policy....I plan to check my regular insurance policy as well.

Any one here have gap Insurance? Since these cars took such a nose dive I’m now certain I owe much $ than the car is worth(probably about 20-25k). I made the decision to at end of 2023 to finance the whole cost of car as rate I was offered was excellent, so I figured I’d keep my cash and take the loan. I just called my credit union to see how much it would be to add it. Might be a good idea for others in same situation.

Here’s an update - my credit union said when loan value gets to 100k I could purchase Gap Insurance then. It currently costs 540$ for the year. I would need to understand exactly how it works , my auto insurance broker also shopped it for me, progressive offered it for 52$ for the year BUT in switching to them it would raise my premium about 1000$ per year - no thanks -lastly , just got off phone with my “porsche ambassador “ , she said she’s selling a fair amount of new Taycans, wasn’t sure what they were doing with Targa allocations at moment and said my 2023 GTS sedan was worth 100k on a trade in currently -

 

[BigBob]

Here’s an update - my credit union said when loan value gets to 100k I could purchase Gap Insurance then. It currently costs 540$ for the year. I would need to understand exactly how it works , my auto insurance broker also shopped it for me, progressive offered it for 52$ for the year BUT in switching to them it would raise my premium about 1000$ per year - no thanks -lastly , just got off phone with my “porsche ambassador “ , she said she’s selling a fair amount of new Taycans, wasn’t sure what they were doing with Targa allocations at moment and said my 2023 GTS sedan was worth 100k on a trade in currently -

Sounds a bit like a foxtons agent (realtor) saying they’re selling lots of houses. Pinch of salt.

As for the gap insurance, it sounds like you can just opt not to buy GAP from the credit unions insurer with no financial cost? Over here anyway, Gap insurance is sold as a stand alone policy. Ie my main car insurer doesn’t know I have it, and it’s from an unrelated insurer. So just do that.

 

[Redhot2474]

Sounds a bit like a foxtons agent (realtor) saying they’re selling lots of houses. Pinch of salt.

As for the gap insurance, it sounds like you can just opt not to buy GAP from the credit unions insurer with no financial cost? Over here anyway, Gap insurance is sold as a stand alone policy. Ie my main car insurer doesn’t know I have it, and it’s from an unrelated insurer. So just do that.

That’s correct, once my loan gets to 100k or less which will be about a year I’ll snatch up that policy

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