Can still be helpful. Thankfully last year when my 2019 got totalled I got back more than what I owed with insurance. Because of that I got a refund with GAP
What refund did you get with GAP? GAP is a sliding scale policy to cover negative equity. If the insurance company paid out more than what is owed on a total loss claim, the GAP will pay $0.
You are fortunate you got a @ 60% refund. Just to be clear, getting a partial refund is not hitting the jackpot, but it is certainly better than getting nothing back. Here is the way I look at this - and this will probably be controversial on this forum. If you are buying a new vehicle and financing an amount that makes buying a $500 GAP policy look like a good idea, you probably should not be buying that vehicle new. You would be better buying used and let someone else take the inital depreciation hit. Here is what I mean by this. The reason to buy GAP at $500 is to cover a negative equity that you cannot afford. That should be the only reason. If you have enough cash on-hand, there is no reason to buy GAP - definitely at $500! In this case, you would be better gambling that you will not have a total loss during the negative equity period rather than paying the $500.
All fair points but I will also state that even with my situation at the time(it was not a good month) vehicle hunting wasn't really a thing. Also thanks to Ford being very king to dealership employees I got 1.9% interest with only $500 down. I will also add that the vehicle that was traded in I was upside down by $10,000 and it didn't help. Now that I only have the 93 Pathfinder and 94 F150 I'm ok at this time as I'm getting other things taken care of. Will a new truck be in my future? Absolutely. Will it be a Ranger? I suspect not as I'm not impressed with certain things. Might go back to Nissan and get a Frontier.
Here are two thoughts on this:
I understand it was financed, but I still got some of it back. As for the upside down part? Yeah don't want to wish that on anyone
Full Replacement endorsements like Dave had are rare and need to be added when vehicle is brand new and usually last only a few years. It is company specific and varies by state. There are stated value and agreed value endorsements normally used by classic car owners, those can be beneficial or harmful if vehicles actually appreciate like a couple years back. If you are reimbursed for the actual cash value that is fair since your are getting what the vehicle is worth. To get a brand new vehicle regardless of the age of the totaled car is a betterment and not generally how insurance is designed to work or how it is priced. It is a gimmicky add on which is priced for, no free lunch, most people do not suffer from a claim that is a total loss so the chance of using it are slim. If these new vehicles total out at a higher percentage, the cost of these endorsements will skyrocket and or be pulled off the table if offered at all.
Thanks for clarifying Chris. What's odd is that me and @Chris M have the same company (Travelers) yet have received different info on how the endorsement works. I'm sure different companies have different stipulations. The only reason I'm thinking mine is right is because besides my agent, I also had both my total loss adjusters confirm that it has to be added on when the vehicles new, has under 500 miles on it and lasts for up to 5 years. Obviously because they paid my claim and my truck was 4 years old and this was added when I bought it new. I know when I was back east and had Commerce Mapfre insurance (that's where I originally found out about this endorsement) it worked the same.
Just to add to all this good info. Why would someone pay for GAP at $500 when you can add FRV for under $100. On my '19 it was $67/yr and on my new '23 it's only $85/yr. If you're buying this to protect you from a total loss GAP is not the one to buy unless your company doesn't offer FRV.
You have a really good agent! My total loss adjuster said most don't have this endorsement because their agent either doesn't know about it or doesn't recommend it. That's why when he first called me with a $35,000 loss number I questioned him on the amount because I had FRV. He said I never checked your policy for it because it's so rare that someone has it. The new number was just over $51,000 because I had this. A huge difference.
Sucks. But, if it was me I wouldn't want a vehicle with that extensive list of repairs. So, yea it sucks. Big time. But IMO it is ultimately the best option for you.
FRV will cover you at todays prices and will give you your sales tax and registration fees back. WIth todays inflated prices it saved my butt! Without it I would've got a check for $35,574.13 and with it I received $51,081. On my '19 it was an additional $67/year and on my '23 it's $85.00. I never thought I'd ever use until I needed it and it was worth getting an additional $16K.
