Bought a used car yesterday from a dealer ... got a new job and now need a second car. Very nice car: 2004 Nissan Maxima SL with everything, even a heated steering wheel! But ... I must have been hungover or something, because when it came time to exerience the "financial officer," he kept pushing the typical papers under my nose and I kept signing.

Then he got to one called "gap insurance." He truthfully explained what it's for: to cover the gap between what you might owe on the car vs what you'd get from your insurance company if it were totaled. Kind of made sense since I didn't put much money down, but I'd never heard of it before, because usually I buy a car outright or put a good chunk of change down.

Yeah, I signed for it -- at $799.00. Now, he didn't come right out and say its a legal requirement, but he sure in hell made it sound like I didn't have a choice. Regardless, I was a bonehead.

Called the dealer back and spoke with the salesperson, but it was just after closing time. She suggested I call this financial officer first thing Monday morning -- I'm actually going to show up on their doorstep to make sure I can get this removed.

So, my question is, Have any of you canceled gap insurance before? I'm hoping it won't be a headache since I just bought the car on Saturday, but I've been kicking myself for signing it in the first place all weekend, and just want to get it off of there.

Yes, I feel stupid.

 

If the financing hasn't actually gone through the bank at this point, you should still be able to cancel. They may try and hold you to it since you've already signed the form though...part of that whole arbitration clause on one of the many papers you signed.

Depending on how far upside down you may be in the car, it may not be a bad thing to keep it. My idiot sister-in law put her car in the ditch and because of her poor credit and subsequent borderline illegal interest rate she was severely upside down in her car and the gap insurance was the only thing that saved her from having to pay a few thousand out of pocket to pay off the loan after the insurance totalled it.

If you have a decent sized nest egg in your savings or a rich family member then I wouldn't worry about getting rid of it.

Good luck.

 

Thanks, yeah, if I was too far underwater I'd say it might be worth it, but at most right now it'd be a bit over $1000, which isn't much more than the insurance itself.

So I'll go in there first thing tomorrow and ask to cancel it. I don't know if this was intentional or a mistake, but looking through the packet of documents they gave me (credit report, bill of sale, warranty info, etc.) there's not a scrap of paper about who is providing the gap insurance or what specifically it covers. I'm guessing this is not a coincidence.

 

In this neck of the woods, any such contract can be canceled in 3 business days for any reason or no reason. But your state should have a website with consumer protection rights spelled out for your situation.

 

Not sure if that would apply to insurance, but since it's insurance I ought to be able to cancel it. But it'll be a lot easier if I can do it now through the dealer rather than having to dick around through some third party. It's a large Toyota dealership with a decent reputation, so I may be making a mountain out of a molehill. Mostly I'm kicking myself for not recognizing this as just another way to squeeze more $$ out of me.

 

Well, the dealer was good about re-doing the contract, since they hadn't sent it in yet. Note to self for the future: read before signing!

 

I had GAP insurance on my last truck and was in a really bad accident and it was totaled prior to being paid off and the GAP insurance kicked in and paid off the rest of the loan that the insurance didn't pay off because it wasn't worth what i owed personally I always go with the GAP insurance in my book it's worth having. I actually owed a couple thousand over and it covered it.

That was just my experience with it though.

 

Well, sounds like it was a good decision in your case. In my case I wouldn't have been under water any more than the cost of the insurance itself (almost $800), and after a few months' payments I wouldn't have needed it any longer. The finance guy said I could cancel it after I made 5 or 6 payments, but at that point I would've been dealing with a third-party vendor, and I've heard horror stories of people trying to cancel at that point. Glad it worked out for you, though.

 

My only comment is that you can always get gap insurance from your insurance broker at far less than what was being charged to you. Many leases require it (Honda does not).