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 Posted: Mon Aug 16, 2010 9:39 am Post subject: Loan/Lease Payoff Coverage |
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We have a loan on our vehicle through a financial institution. A local agent suggests that we add the loan or lease payoff coverage to our auto insurance. What's it actually? Can we do without it?
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autograderB
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| Posted: Mon Aug 16, 2010 10:09 am Post subject: |
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| I think what they are talking about is Gap coverage. What that is if your car is totaled and you owe more than the value of the car the insurance pays only the value of the car. If you have Gap coverage that picks up the difference between the value of the vehicle and what you owe |
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Borisbadenov
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| Posted: Tue Aug 17, 2010 6:58 am Post subject: |
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I guess you can add loan/lease payoff to your auto insurance after you have both Collision and comprehensive coverage in place.
It will simply pay you for the difference between what you owe on the car and what you get from the carrier once your vehicle is totaled. Yeah, you need to pay for the Collision and comprehensive deductible. |
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roddick
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| Posted: Wed Aug 18, 2010 9:42 am Post subject: |
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Hey Rod, I hope the payment that's made under such coverage will not be more than 25% of the ACV.
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Juanita
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| Posted: Thu Aug 19, 2010 7:32 am Post subject: |
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You may have loan/lease payoff coverage on the auto insurance that you have. Once you deductible is met and the insurers pays the KBB value, then you may expect the remaining to be covered by your auto insurance.
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sil
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| Posted: Fri Aug 20, 2010 6:33 am Post subject: |
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| Loans that offer low payments may not be good for you at times. You'll be in trouble once you go for a low payment loan and then end up owing something that's more than the KBB value of your car. You'd need to trudge through a lot of hassles in case you need to file a claim. |
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steven
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| Posted: Sat Aug 21, 2010 10:38 am Post subject: |
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| It's best for you to keep checking your vehicle's Kelley Blue Book value at times. You could be sure whether or not you'd need to add loan payoff coverage to your auto insurance. |
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JeremyHolter
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| Posted: Thu Aug 26, 2010 5:00 pm Post subject: |
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In most cases, when you purchase auto insurance, the insurance company will only cover the car for Actual Cash Value. Cost New – Depreciation = Actual Cash Value. In some cases, a person may owe more money on their car then what the Actual Cash Value is, especially when you take into consideration how automobiles depreciate in value so quickly. Therefore, if you total your car, you could end up owing the bank money on a car you can no longer drive.
Loan/Lease Payoff Coverage, commonly referred to as GAP Insurance, was designed to cover the balance due to the bank after the auto insurance policy pays. |
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Ted_Taylor
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| Posted: Thu Aug 26, 2010 5:04 pm Post subject: |
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Juanita brings up a valid concern. In many cases, the insurance company will place a stipulation on the maximum amount the Loan/Lease Payoff Coverage will pay out, typically 25%. Be sure to ask your agent if there is a maximum payout amount on this coverage.
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Ryan_Nickels
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