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Lease - Gap Coverage #5142665
06/24/19 10:37 AM
06/24/19 10:37 AM
Joined: Feb 2005
Posts: 824
Scituate MA
coopns Offline OP
coopns  Offline OP

Joined: Feb 2005
Posts: 824
Scituate MA
Leasing a Tacoma.

Put down 4k, lease is 100 a month/24 months. I decided on $25 a month for Wear/Use.

Any thoughts on GAP coverage which is the difference between loan amount and insurance settlement.

They explained it:
Gap insurance pays for the difference between the value of a car at the time it’s totaled or stolen and the balance of its loan or lease. Though it seems to refer to that difference, “gap” actually stands for “guaranteed asset protection.”

A new vehicle loses some value the minute you drive it off the lot — and 20% to 30% total in the first year. After that, the car’s value will continue to decline. As of 2017, the average rate of depreciation, or lost value, will be 17.8% a year during years two to six, according to Black Book, which tracks used-car pricing.

But standard auto insurance pays only what a car is worth at the time of a theft or accident. When you owe more on your car loan or lease than that, gap insurance comes to the rescue..

So I put down 4k. Car is valued at 28. Residual Value is 24398.

Do I take the Gap coverage or not?

Advice / Recommendations

Last edited by coopns; 06/24/19 10:53 AM. Reason: Gap Coverage definition

Coop
Re: Lease - Gap Coverage [Re: coopns] #5142680
06/24/19 10:56 AM
06/24/19 10:56 AM
Joined: Nov 2014
Posts: 1,085
NE Florida
Throt Offline
Throt  Offline

Joined: Nov 2014
Posts: 1,085
NE Florida
I've leased once and my wife has leased twice, all 3 times GAP coverage was built-in. Wonder why that isn't the case here


'18 Honda Accord Touring, 1.5T, 11,100mi, PPPP 5w30 w/ FU
'19 Elantra, 2.0L, 700mi, FF/Filter, hers (lease)
Re: Lease - Gap Coverage [Re: coopns] #5142696
06/24/19 11:14 AM
06/24/19 11:14 AM
Joined: Apr 2010
Posts: 3,555
Atlanta,GA
BMWTurboDzl Offline
BMWTurboDzl  Offline

Joined: Apr 2010
Posts: 3,555
Atlanta,GA
GAP was built-in when I leased.

On a purchase/finance the "lost value" when you "drive off the lot", is mostly in the form of the sales tax you paid. So no, vehicles don't loose 20-30 percent of their value. That being said GAP insurance protects you and the finance company. It protects them because they'll get paid which also protects you because you won't have to worry about a charge off on your credit over the deficiency balance.

You can shop premiums of course.

Note: Never put money down on a lease. That money is gone.

Last edited by BMWTurboDzl; 06/24/19 11:16 AM.

“It took untold generations to get you where you are. A little gratitude might be in order. If you’re going to insist on bending the world to your way, you better have your reasons.”

435i
Re: Lease - Gap Coverage [Re: coopns] #5142701
06/24/19 11:17 AM
06/24/19 11:17 AM
Joined: Apr 2017
Posts: 2,011
Ohio
hallstevenson Offline
hallstevenson  Offline

Joined: Apr 2017
Posts: 2,011
Ohio
If you want gap insurance, get it through your insurance company not the dealer or their finance company. Gap insurance is a big profit for them. I bet your insurance carrier's cost will be 1/2 what the dealer is quoting.

Re: Lease - Gap Coverage [Re: hallstevenson] #5142705
06/24/19 11:21 AM
06/24/19 11:21 AM
Joined: Dec 2011
Posts: 6,344
North Carolina
rooflessVW Offline
rooflessVW  Offline

Joined: Dec 2011
Posts: 6,344
North Carolina
Originally Posted by hallstevenson
If you want gap insurance, get it through your insurance company not the dealer or their finance company. Gap insurance is a big profit for them. I bet your insurance carrier's cost will be 1/2 what the dealer is quoting.

If it is available through your insurance.

GAP cost me $250 from the dealer; that's their cost.


"Zed's dead baby, Zed's dead."
Re: Lease - Gap Coverage [Re: coopns] #5142723
06/24/19 11:33 AM
06/24/19 11:33 AM
Joined: Feb 2005
Posts: 824
Scituate MA
coopns Offline OP
coopns  Offline OP

Joined: Feb 2005
Posts: 824
Scituate MA
Thanks for the info.

Liberty Mutual doesn't offer Gap on Lease.

So for 25 a month for 2 years, probably should get it?


Coop
Re: Lease - Gap Coverage [Re: coopns] #5142726
06/24/19 11:38 AM
06/24/19 11:38 AM
Joined: Sep 2012
Posts: 628
Michigan
NO2 Offline
NO2  Offline

Joined: Sep 2012
Posts: 628
Michigan
It only protects you in the event your lease car is totaled. How much would affect your finances to have 2 lease payments? If that is easily affordable, skip the gap. If not, get it. Some auto insurance companies have 'newer car' insurance, which reimburses you at a rate of a 1 yr newer car. That might be worth considering.

The other time to get gap is on a heavily subsidized lease (where the car manufacturer artificially sets the residual higher than it would normally be). That usually is for luxury cars.

Last edited by NO2; 06/24/19 11:40 AM.
Re: Lease - Gap Coverage [Re: coopns] #5142730
06/24/19 11:42 AM
06/24/19 11:42 AM
Joined: Aug 2003
Posts: 11,651
Buffalo, NY
JTK Offline
JTK  Offline

Joined: Aug 2003
Posts: 11,651
Buffalo, NY
When I bought the van in my sig used, my sales guy tried slipping in gap insurance on the contract, just before I signed it. I was peeved. I got the typical 'I'm surprised you don't want it' look, then he went and reprinted the contract without it.

I really don't think gap insurance is necessary on a Toyota product, especially a truck, unless you are going into a purchase way upside down and rolling a ton into the loan.


2017 Ram 1500 4x4, 3.6L.
2016 Nissan Quest SV (Babe magnet IV)
2015 Nissan Versa 1.6 S
Re: Lease - Gap Coverage [Re: coopns] #5142732
06/24/19 11:47 AM
06/24/19 11:47 AM
Joined: Apr 2012
Posts: 6,872
MA
Wolf359 Online content
Wolf359  Online Content

Joined: Apr 2012
Posts: 6,872
MA
On a lease you want to put down as little as possible. In theory nothing. You're defeating the whole point of gap insurance if you put down 4k. Then you don't have a gap and then the insurance won't pay out. Also ask what happens if there's an accident and the car is totaled out. You probably won't get your 4k back which is why posters above say to never put anything down on a lease. When it gets totaled, the insurance company sends the money to the owner of the car which is the leasing company. Good luck trying to get anything back. Take the gap coverage on a no money down lease or minimal initial payment.

Re: Lease - Gap Coverage [Re: coopns] #5142733
06/24/19 11:48 AM
06/24/19 11:48 AM
Joined: Feb 2005
Posts: 824
Scituate MA
coopns Offline OP
coopns  Offline OP

Joined: Feb 2005
Posts: 824
Scituate MA
NO2

Could you explain that a little further: "It only protects you in the event your lease car is totaled. How much would affect your finances to have 2 lease payments? If that is easily affordable, skip the gap. "

My lease payments are only 100 per month so can handle that.

Reason I put down 4k is our monthly is so important...needed as cheap as possible. (4 kids, college, cars...hellish house mortgage...all good but)

I might buy at the end but I think it will probably be too much again.


Coop
Re: Lease - Gap Coverage [Re: coopns] #5142793
06/24/19 12:50 PM
06/24/19 12:50 PM
Joined: Jan 2013
Posts: 230
Lake County, Ohio
ls973800 Online content
ls973800  Online Content

Joined: Jan 2013
Posts: 230
Lake County, Ohio
Next time instead of such a large down payment on a Toyota lease, look into multiple security deposits. You put down the money and it reduces your money factor. At the end of the lease, you get all of your money back unless you have excessive wear and tear or over the miles allowed. My Highlander lease using 9 multiple security deposits ($3800.00 down) lowered my payments by a little over $40.00 a month. I received all of my money back at the termination of the lease.

Also, putting $4000.00 down as a down payment all you have done is bought a lower payment. If you put the $4000.00 aside and just made the extra cost of the payment each month out of that money put aside, you would still have that money in case of an emergency as you whittle away at it with each monthly payment.

You also do realize that if you wreck the car, even with GAP insurance, you will not get any of the $4000.00 back, correct?

Toyota Financial is one of the few companies which does not include GAP insurance in their leases. I paid around $40.00 a YEAR through my insurance company (Auto Owners) for full GAP coverage. Dealer issued GAP is always very expensive vs insurance issued GAP. Too bad your insurance company doesn't sell it.

Re: Lease - Gap Coverage [Re: coopns] #5142860
06/24/19 02:00 PM
06/24/19 02:00 PM
Joined: Jan 2009
Posts: 7,179
New England
gathermewool Offline
gathermewool  Offline

Joined: Jan 2009
Posts: 7,179
New England
What does that wear/use coverage cover?

From those I know who have leased and stayed within mileage restrictions, they've owed nothing at the end of the lease. One lady turned her lease in with a lot of dings, dents and mostly-worn tires.

//

Have you considered used? Get a beater for a couple of years and may may save enough for a 6-8 year-old truck with plenty of life left in it.


'14 Forester XT FA20DIT (Cobb Stage 1)
Edge 0W-40 + FU filter (64,774 miles)
'15 Legacy FB25 (OEM Stage, uh, neg. 7?)
Magnatec 5W-20 + FU filter (47,300 miles)
Re: Lease - Gap Coverage [Re: gathermewool] #5142916
06/24/19 03:11 PM
06/24/19 03:11 PM
Joined: Apr 2017
Posts: 2,011
Ohio
hallstevenson Offline
hallstevenson  Offline

Joined: Apr 2017
Posts: 2,011
Ohio
Originally Posted by gathermewool
From those I know who have leased and stayed within mileage restrictions, they've owed nothing at the end of the lease. One lady turned her lease in with a lot of dings, dents and mostly-worn tires.
I think people believe that leased vehicles must be returned in mint condition and that's really not the case. They make allowances for your typical parking lot dings or scrapes and don't penalize for that in most cases. It depends on the severity, of course. Tires wear out so unless they have their wear bars showing, they can't ding you for that.

Originally Posted by gathermewool
Have you considered used?
Too late for that now....

Re: Lease - Gap Coverage [Re: hallstevenson] #5142979
06/24/19 04:36 PM
06/24/19 04:36 PM
Joined: Jan 2009
Posts: 7,179
New England
gathermewool Offline
gathermewool  Offline

Joined: Jan 2009
Posts: 7,179
New England
Originally Posted by hallstevenson
Originally Posted by gathermewool
From those I know who have leased and stayed within mileage restrictions, they've owed nothing at the end of the lease. One lady turned her lease in with a lot of dings, dents and mostly-worn tires.
I think people believe that leased vehicles must be returned in mint condition and that's really not the case. They make allowances for your typical parking lot dings or scrapes and don't penalize for that in most cases. It depends on the severity, of course. Tires wear out so unless they have their wear bars showing, they can't ding you for that.

Originally Posted by gathermewool
Have you considered used?
Too late for that now....


The woman I'm talking about is my sister-in-law. The WRX she returned was in what I would call [censored] condition. What I mean, is that if I test drove it with the hopes of buyin it, I would immediately walk away and not even consider a low-ball offer.

Zero penalties and nothing out of pocket for her.

As an Aside: it's for some reason a cultural thing for my wife's family to put in MULTIPLE floor liners. My SIL had the factory cloth, a set of plastic, and then another set of plastic liners. When she had me test drive her WRX prior to lease turn in due to an extremely stiff clutch (that was five times stiffer than that in my STI), I finished, parked it, got out, and immediately threw both plastic liners on her lawn and said [censored] is this!? Do you remember all of those recalls due to floor liners? This had them beat by a mile! I felt unsafe driving the [censored] thing for a few miles and that was what she drove the last XXK miles!


'14 Forester XT FA20DIT (Cobb Stage 1)
Edge 0W-40 + FU filter (64,774 miles)
'15 Legacy FB25 (OEM Stage, uh, neg. 7?)
Magnatec 5W-20 + FU filter (47,300 miles)
Re: Lease - Gap Coverage [Re: hallstevenson] #5142999
06/24/19 05:07 PM
06/24/19 05:07 PM
Joined: Oct 2014
Posts: 4,606
Utah
CKN Offline
CKN  Offline

Joined: Oct 2014
Posts: 4,606
Utah
Originally Posted by hallstevenson
Originally Posted by gathermewool
From those I know who have leased and stayed within mileage restrictions, they've owed nothing at the end of the lease. One lady turned her lease in with a lot of dings, dents and mostly-worn tires.
I think people believe that leased vehicles must be returned in mint condition and that's really not the case. They make allowances for your typical parking lot dings or scrapes and don't penalize for that in most cases. It depends on the severity, of course. Tires wear out so unless they have their wear bars showing, they can't ding you for that.

Originally Posted by gathermewool
Have you considered used?
Too late for that now....



Used truck prices are crazy. Even more so when there is a Toyota badge on it. That's not a bad lease on the Tacoma.

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