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2021 ID.4 First Edition (Dusk Blue)
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Discussion Starter · #1 ·
If any of y'all got GAP insurance from your lender or the dealer, how much did you pay? I just got it from my new car insurance provider and it seems hella cheap ($16/6months) but I didn't pay attention when we were buying for a point of comparison.
 

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ID.4 1st Edition White / Lunar Grey
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On the last new car I bought, I opted for Liberty Mutual's Better Car Replacement plan that pays using the next year's model as the basis. It was cheap, a couple of bucks a month.

That was for a 2016 S60 which had a high depreciation curve, and was 100% financed.

Didn't opt for it on the ID.4 since I put a chunk down and can't imagine ending up upside down on this car. But I do like aspects of Liberty's version since it will always pay one year newer (this has greater value early on) vs. traditional gap, which covers the loan balance difference dependant on loan term, down payment, and depreciation.

Not suggesting Liberty's is hands down better, just different, varies by circumstance. I'm sure it has a bunch of disclaimers that limit payouts if the following model year has a major refresh and price hike.
 

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Like Nai3t I dug into the mattress and traded in a never wrecked 4 year old car. There is a loan but I decided that I didn't need gap insurance. I had it on my previous 2 cars though including my VW TDI Sportwagen, sorry but I can't remember the cost and it would be obsolete by now anyway.
 

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Gap insurance is for leased cars. In case of a total, it pays the full value of the car to the credit company.
 

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If any of y'all got GAP insurance from your lender or the dealer, how much did you pay? I just got it from my new car insurance provider and it seems hella cheap ($16/6months) but I didn't pay attention when we were buying for a point of comparison.
I am covered with Gap through Volkswagon lease. If you purchase a car be careful how much you put down. Gap covers the difference between your loan and what the car I sent worth when total loss is incurred. If you put a large down payment on a purchase to keep monthly payment down. Your large down payment could easily be your loss.
 

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Whaa? No, that's misleading advice.

Insurance (not gap) is intended to reimburse the owner the cost to replace the vehicle with a like mileage same year vehicle.

Regardless if the owner owes $45,000, $20,000, or $5,000 to VW Credit, in the event of a total loss, straight insurance is going to value the vehicle the same.

If you think of it as insurance cutting the owner a check for the determined value of $40,000, and the owner is responsible to settle up with VW Credit (two separate transactions) then the owner is left in the same financial position whether they owed on the car or not, as long as they're not upside down.

In the $45,000 example, gap insurance would make up the $5,000 difference, and the owner would never "make money" off that transaction, but they would have a better balance sheet at the end of it (erasing a $45k debt with a $40,000 asset).

For the other two examples, whether a large down payment was paid or not, when all is said and done, the bottom lines are going to be identical.
 

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Whaa? No, that's misleading advice.

Insurance (not gap) is intended to reimburse the owner the cost to replace the vehicle with a like mileage same year vehicle.

Regardless if the owner owes $45,000, $20,000, or $5,000 to VW Credit, in the event of a total loss, straight insurance is going to value the vehicle the same.

If you think of it as insurance cutting the owner a check for the determined value of $40,000, and the owner is responsible to settle up with VW Credit (two separate transactions) then the owner is left in the same financial position whether they owed on the car or not, as long as they're not upside down.

In the $45,000 example, gap insurance would make up the $5,000 difference, and the owner would never "make money" off that transaction, but they would have a better balance sheet at the end of it (erasing a $45k debt with a $40,000 asset).

For the other two examples, whether a large down payment was paid or not, when all is said and done, the bottom lines are going to be identical.
Your upside down the minute you drive a car off the lot for the most part. I leased an id4 and drove it off the lot without paying a penny. If I totaled the car at the first traffic light no matter what the car is worth Gap covers it. If I put 5k down the Insurance pays the dealer what the present value of the car to the dealer. The dealer does not replace the car for the customer the customer must start over again and sign a new lease for a car.

The same principal applies to purchasing a car. Don’t get me wrong if a cars present value does not decrease or may evan increase then your initial Big down payment all or some might be safe with Gap. I love my id4 but it’s no mid-engine Corvette so the chance of little depreciation would be a long shot at best. Gap pays off what amount of loan shortfall is on the car if one exists. The fact you put a large down payment is yesterday’s news unless the car is worth more than the loan. That’s the way it was presented to me.
 

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Let's not muddy the waters and make this a lease vs. purchase discussion.

My last new car was a 0% offer for 5 years, so I put nothing down, and was upside down immediately, so yeah, some kind of gap coverage in that scenario is prudent. But often being upside down on a car is caused by other factors such as excessive interest rates and longer than traditional loan terms, or a bad deal up front, meaning it's a purchase costing more than it should.

But you wrote " If you put a large down payment on a purchase to keep monthly payment down. Your large down payment could easily be your loss. " I'm saying this isn't the case. In my example from my previous reply, the insurance will pay $40,000 no matter what.
  • If $20,000 is owed to VW Credit at the time of loss, then the owner will have $20,000 in-pocket, and the other half will cancel the $20,000 owed.
  • If $5,000 is owed (because of a large down payment), the owner will have $35,000 in pocket, and the other $5,000 will cancel the debt.
In your lease example, when I drove said car to sell it (it was 5 years old at this point), had I totaled it on the way to the sale, I would have had $17,000 in my pocket from the insurance payout. Had I been leasing that same car and totaled it on the drive to turn-in, I would have $0 to show for it.
 

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$16 for 6 months is a good price. My insurer (Geico) didn't offer GAP insurance, and VW Credit wanted to charge me $700 or more for it, so we skipped it — in the event of a total loss, having to pay the difference between what insurance would pay us and what we owe on the loan wouldn't be catastrophic for us financially, so it didn't seem like the risk of that happening early in the loan when the shortfall would be largest justified the cost. I'd have gotten it if I could have done it for $32/year, though.
 

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2021 ID.4 First Edition (Dusk Blue)
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Discussion Starter · #11 ·
$16 for 6 months is a good price. My insurer (Geico) didn't offer GAP insurance, and VW Credit wanted to charge me $700 or more for it, so we skipped it — in the event of a total loss, having to pay the difference between what insurance would pay us and what we owe on the loan wouldn't be catastrophic for us financially, so it didn't seem like the risk of that happening early in the loan when the shortfall would be largest justified the cost. I'd have gotten it if I could have done it for $32/year, though.
I had Geico and I switched to Progressive because it was basically the same price except they offer GAP insurance.
 

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ID.4 Pro S, Moonstone Gray w/Galaxy Black
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I skipped the GAP insurance offered y VW and instead opted to add Allstate's New Car Replacement to my existing policy. In the event the vehicle is totaled my vehicle is replace by the same make and model at no cost to me.
 

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All leases through Volkswagen Credit include gap coverage. A separate policy is not needed.
The dealer assured me over and over that this is true for all VW Credit Leases. The 'bad cop' sales manager couldn't find it and I haven't been able to find it anywhere in the contract. Do you know where this is spelled out? Or, is it because VW Credit owns the vehicle? This is my first lease. Calling VW for an explanation is on my to-do list.
 
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