Quote:
Originally Posted by radmjk
The GAP doesn't matter in my experience. You are never going to recoup that down payment. I learned the hard way two months back on a less than a year old 2019 Range Rover Sport that I put $7,000 down on. Vehicle was totaled after 11 months in a bad accident. Thankfully all in my family survived with minor injuries. We had GAP, that only covers difference between what vehicle is worth and what is owed if under water so to speak. You will never ever see that money again unfortunately. Now I know and hopefully you all do too!
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It sounds like you misunderstood which "gap" was being filled by GAP insurance. It isn't designed to fill the "gap" between what you paid for the car and its valuation at total loss (i.e. recoup your loss in value) instead it is for eliminating the "gap" between your outstanding debt and the car's current value (i.e. the underwater loan balance).
If you end up needing to use your GAP insurance its job is to leave you walking away with $0 out of pocket (usually covers the loss in value + deductible). But that will leave whatever downpayment you put on the car evaporated (since it was underwater). GAP is most useful for cars that depreciate quickly and high LTV (Loan to Value) loans and leases. My LTV at purchase was under 70% (I put a bit over 30% down) so I could skip GAP, but opted for it anyway as it was only $300 from my CU.