Gap insurance
Thread Starter
Senior Member
Joined: Apr 2016
Posts: 357
Likes: 56
From: Bucks County PA not far from the Delaware River North & East of Philly by an hour.
‘68 Pontiac convertible, ‘71 Corvette 4 spd, ‘20 Accord Touring, 06 Duramax crew-c
Gap insurance
Is $299 a good price for GAP insurance. I figure this car of mine is worth a lot less now than when I bought it. I only had gap coverage once about 35 years ago when I last leased a vehicle (at least I think it was a lease). Or should I just invest all that money in some Berkshire Hathaway stocks?
MBWorld Fanatic!
Joined: Jun 2015
Posts: 9,368
Likes: 4,741
From: Maryland
2024 S580
I wouldn't say its worth a lot less than when you bought it. How much do you owe on it and whats the loan term? Are you upside down on the loan?
Only reason GAP insurance makes sense is if you think you're likely to be upside down on the loan.
Only reason GAP insurance makes sense is if you think you're likely to be upside down on the loan.
Thread Starter
Senior Member
Joined: Apr 2016
Posts: 357
Likes: 56
From: Bucks County PA not far from the Delaware River North & East of Philly by an hour.
‘68 Pontiac convertible, ‘71 Corvette 4 spd, ‘20 Accord Touring, 06 Duramax crew-c
Oh I have to be under water - I knew I would be before I signed on the dotted line because I didn’t put anything down. No, wait - that’s a lie. I put $45 down because I made a guess of how much I needed the bank to write the check for and when the dealer was done figuring it all out I owed them $45 more. It hurt but I paid it! It is a 72 month term, but I’m confident It will be paid off earlier.
MBWorld Fanatic!
Joined: Jun 2015
Posts: 9,368
Likes: 4,741
From: Maryland
2024 S580
Even with $0 down the depreciation curve on your car is going to be a lot flatter than a new car.
Its up to you, its not expensive if it brings you peace of mind but I personally wouldn't bother.
Its up to you, its not expensive if it brings you peace of mind but I personally wouldn't bother.
MBWorld Fanatic!
Joined: Aug 2014
Posts: 1,955
Likes: 693
From: Tennessee
W214 E450
I personally would not get gap insurance. It's just another money grab. In some cases, it won't cover the gap anyway. For example, if you have existing damage and then have an accident that totals the car, the gap insurance will not cover the existing damage. They will estimate the preexisting damage and deduct that from the payout for gap. Having said that, $299 is not really much weather you invest it or pay for gap insurance. It's not going to make much financial difference.
MBWorld Fanatic!
Joined: Oct 2010
Posts: 8,201
Likes: 4,427
From: Corona Del Mar, CA
2019 SL450, 2019 E450 Luxury Trim Wagon, 2024 BMW I7 xDrive60
Just because I was informed of this less than a week ago, when I leased a new BMW, BMW includes gap insurance as part of every lease.
MBWorld Fanatic!
Joined: Aug 2014
Posts: 1,955
Likes: 693
From: Tennessee
W214 E450
When you say "included", I would assume that you are paying for it as part of the lease cost. In that case, I wouldn't call it included but rather enforced.
Trending Topics
MBWorld Fanatic!
Joined: Oct 2010
Posts: 8,201
Likes: 4,427
From: Corona Del Mar, CA
2019 SL450, 2019 E450 Luxury Trim Wagon, 2024 BMW I7 xDrive60
MB World Stories
The Best of Mercedes & AMG
New Mercedes-AMG SUVs Arrive With NEW V8 Engine: 12 Things You Need to Know
Verdad Gallardo
8 Oddball Mercedes Ideas That Actually Made it to Production
Verdad Gallardo
Dubai Tuner Gives the Mercedes G-Class An Entirely New Look
Verdad Gallardo
Six Gift Ideas Your AMG Loving Dad or Grad Will Cherish
7 Craziest Things AMG Gas Ever Built
Verdad Gallardo
New Electric Mercedes-AMG GT 4-Door Coupe Unveiled: 10 Things You Need to Know
Verdad Gallardo
6 Mercedes Models That Did NOT Age Well (But Are Somehow Still Cool)
Verdad Gallardo
Manual Mercedes? 6 Times Sindelfingen Let Drivers Have All The Fun
Verdad Gallardo
Mercedes SLR McLaren 722 S Is Extremely Rare Example Modified by McLaren
Verdad Gallardo
MBWorld Fanatic!
Joined: Feb 2017
Posts: 2,340
Likes: 1,225
From: Baltimore County, MD
'13 s212 63 p30. '06 LX470
Did we ever find out if the forum member who thought gap was included but it may not have covered his security deposits had a proper outcome.
For those that recently got gap with a lease through mb, was there language about recovering security deposits, or language about that liability in a totaled vehicle situation.
No dog in this race but think it’s important to know what the insurance covers and if there is a better strategy for leasing when relying on gap. Gap is so inexpensive, it can make sense when that gap is more than 2000 dollars as that is what it might cost after paying it for the life of the loan. Like an aftermarket warranty, it’s valuing that max likely liability. In a normal economy with 40% depreciation in two years, gap makes sense imo especially when no down payment was applied to even out the difference in payment balance and value of used sale or trade.
For those that recently got gap with a lease through mb, was there language about recovering security deposits, or language about that liability in a totaled vehicle situation.
No dog in this race but think it’s important to know what the insurance covers and if there is a better strategy for leasing when relying on gap. Gap is so inexpensive, it can make sense when that gap is more than 2000 dollars as that is what it might cost after paying it for the life of the loan. Like an aftermarket warranty, it’s valuing that max likely liability. In a normal economy with 40% depreciation in two years, gap makes sense imo especially when no down payment was applied to even out the difference in payment balance and value of used sale or trade.
MBWorld Fanatic!
Joined: Feb 2017
Posts: 2,340
Likes: 1,225
From: Baltimore County, MD
'13 s212 63 p30. '06 LX470
So I know what gap is as indicated by my post. The question resides in the fact that msd are supposed to be refundable and are essentially a loan against the interest rate. They should not be considered “paying down the loan” and therefore would still need to be refunded and not considered in the liability of the insurance. The poster I mentioned was not receiving the proper value of the gap because the insurance counted the msd. Asking specifically who is responsible to repay the msd, Mercedes? In what case are they not responsible to refund the msd, and does this change the strategy of leasing, gap, and msd.
MBWorld Fanatic!
Joined: Jun 2015
Posts: 9,368
Likes: 4,741
From: Maryland
2024 S580
I get it, but they are still at risk. The security deposit it for the lenders security. That’s why it’s a SECURITY deposit. In the event of a loss if they are made whole by keeping the MSDs, which they can do, they aren’t going to file a gap claim just to get you your MSDs back. Filing a gap claim would potentially raise their rates as the lender has a blanket gap policy.
If they couldn’t keep the MSDs for any reason holding them wouldn’t reduce their risk and they wouldn’t lower the money factor because you paid them. Totalling the car defaults the lease which means the lender can keep the security deposit (or deposits)
In that posters case the gap insurance was never used.
If they couldn’t keep the MSDs for any reason holding them wouldn’t reduce their risk and they wouldn’t lower the money factor because you paid them. Totalling the car defaults the lease which means the lender can keep the security deposit (or deposits)
In that posters case the gap insurance was never used.
Last edited by SW20S; Oct 18, 2024 at 08:12 PM.
MBWorld Fanatic!
Joined: Feb 2017
Posts: 2,340
Likes: 1,225
From: Baltimore County, MD
'13 s212 63 p30. '06 LX470
I get it, but they are still at risk. The security deposit it for the lenders security. That’s why it’s a SECURITY deposit. In the event of a loss if they are made whole by keeping the MSDs, which they can do, they aren’t going to file a gap claim just to get you your MSDs back. Filing a gap claim would potentially raise their rates as the lender has a blanket gap policy.
If they couldn’t keep the MSDs for any reason holding them wouldn’t reduce their risk and they wouldn’t lower the money factor because you paid them. Totalling the car defaults the lease which means the lender can keep the security deposit (or deposits)
In that posters case the gap insurance was never used.
If they couldn’t keep the MSDs for any reason holding them wouldn’t reduce their risk and they wouldn’t lower the money factor because you paid them. Totalling the car defaults the lease which means the lender can keep the security deposit (or deposits)
In that posters case the gap insurance was never used.
MBWorld Fanatic!
Joined: Feb 2017
Posts: 2,340
Likes: 1,225
From: Baltimore County, MD
'13 s212 63 p30. '06 LX470
[QUOTE=VII;9051109]Never had gap insurance, is that $300 per month or per year?[/QUOTE
usually per year and I’ve had it for as low as 60-100 dollars on a 60k loan. I’ve always tried to close the cap as soon as possible so it’s not an issue, just in case of a loss before the gap is closed.
usually per year and I’ve had it for as low as 60-100 dollars on a 60k loan. I’ve always tried to close the cap as soon as possible so it’s not an issue, just in case of a loss before the gap is closed.
MBWorld Fanatic!
Joined: Oct 2010
Posts: 8,201
Likes: 4,427
From: Corona Del Mar, CA
2019 SL450, 2019 E450 Luxury Trim Wagon, 2024 BMW I7 xDrive60
Well, yes and no. I like leasing because I want a new car every 24 to 36 months. I know that it costs me more in the long run, but I like the convenience of it. It’s one of those things where you just sort of get hooked after a while and you just keep rolling from one new car into the next—usually with the same brand.
MBWorld Fanatic!
Joined: Jun 2015
Posts: 9,368
Likes: 4,741
From: Maryland
2024 S580
without reading the fine print, I would have been lead to believe that gap is to cover the loss, and the msd is for lost interest to the lender. When paying the lease over the lease term, there is a fixed amount of interest so I would think totaling changed the interest collected and that could be a liability to the driver. Msd to me is a security against interest, not balance. I guess since I’ve never leased a car and had never really read the situation where the msd does not get returned. It almost makes a case against msd in some situations. Thx for the info. I’m not into leases or buying new myself, nor creating an upside down loan, which is so common.
And before you say you need to keep the car longer, we don’t want to. If we all cared about being as financially responsible as possible we’d be driving 10 year old Corollas.
Last edited by SW20S; Oct 20, 2024 at 12:02 PM.
