I'm buying a motorcycle for $20K and financing over 5 yrs. Gap Insurance - to ensure that the gap between what the insurance company will pay out and what is owed on the outstanding loan is covered - will cost $700. It's a bike with huge demand in the re-sale market, with little supply.
Is it worth it?
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Posted Mar 24, 2018, 8:38 PM UTC
If you put enough down so that you'll never be upside down on the loan you'll not need it. I've never purchased gap because I've never been close to being upside down on a loan, so it's not always necessary. That said, $700 is pricey. Shop around if you actually need it
No... the rate is low enough that I'm not putting much down. The gap insurance quote is from the dealer.
Might be possible to get a better deal from my insurance company? Do they generally do "gap insurance"?
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Yes, some do that. The dealer is likely the most expensive place to buy it
Many insurers do offer the coverage themselves. It would be worth shopping for the best rate.
Some do, some do not. The company I work doesn't. I personally got it through my finance company when I got my loan.
gap on my $35k escalade was $299 affiliated through my bank, Navy Federal. if it's dealer financing, maybe they boost gap price to lock in a profit margin of sorts?
Add it to your insurance policy. You’ll only need it the first couple of years anyway, then you can take it off.
yes, this seems to be the best approach. I didn't think of it before.
That's why we ask reddit :- )
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Typically insurance GAP only covers a portion of the actual cash value of the vehicle where gap through the loan covers the difference regardless of how much it is. Make sure to make an apples to apples comparison.
k... thanks. I'll be sure to drill down with the insurance broker.
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Should have just upvoted this comment instead of writing my own..
Reddit is the one place on the internet where one should read the comments...
Pretty much all insurances are designed to line the insurance company's, and the people who sell their plans, pockets.
$700 for gap insurance? Who are you getting it through? I have it on my car for $20 per year
yeah... everything is different with bikes, because of the perceived higher risk.
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I just saw from your other comment that the GAP quote is from your dealership. That $700 makes since now. Don’t get it through them, get it through your actual insurance for the motorcycle. When I bought my car, the GAP coverage through the dealer was around $1k, but through actual insurance it’s a lot cheaper.
They're different products. Insurance offers a total-loss waiver, which may not cover balance of loan, doesn't cover insurance deductible, is a monthly service charge and therefore no cancellation/pro-rated refund available. So yes, it's cheaper, and it also costs less money. That being said, in many cases you can negotiate the price of GAP from your dealer. Either way, get one of the two if you aren't putting lots of money down. Just remember that they aren't the same product, and then to get rid of them when you no longer need them. Enjoy the bike!