Gap Insurance SCAM? Don't get fleeced by Car Dealers!

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$6.00 every six months or $895.00 upfront? 

A couple months ago, I wrote a post titled Why I Absolutely Hate Buying Cars about my recent experience buying a car from a dealer.

Prior to this year, the last time I bought from a dealer was in December of 2008. I purchased a 2009 Malibu that Chevrolet had just redesigned for the new model year. I bought it from Gus Paulos Chevrolet and they gave me an excellent deal on it. It certainly helped that the 2008 recession was full on, cars weren't selling and dealer lots were full. They gave me financing that matched my credit union rate and didn't try to find ways to rip me off like this most recent dealer did to me. The contract was clean and no "extra" charges were added to what we originally agreed to. Since moving to Salt Lake City from Wisconsin in 1993, I've bought three new vehicles from Gus Paulos and they have been fair to deal with. That Malibu turned out to be a great car and I seriously considered getting another, but decided on a slightly used 2016 Nissan Altima dealer fleet car that had only been titled for 6 months.

What a difference this year I had with this other cutthroat dealership! Prior to a couple months ago, I had never heard of "Gap Insurance" and had to ask what it was when this latest dealer tried to include it on my contract for $895.00 and throw it into the finance agreement so I could pay interest on it! The finance guy stated that if I totaled the car in an accident and received less than I owed on it I wouldn't be responsible for the difference! I refused and almost walked out on them until he redid the contract, taking it out along with a couple other things they were trying to get me for.

Since then, I've done a little research on this Gap Insurance thing. My thoughts: First, if you ever think you need it or want it, you can get it through most car insurance companies for a couple dollars a month! (My car insurance renewal is coming up next month and I actually just checked a quote I had for Progressive: $6.00 for six months.) Don't get it through a crooked car dealer that charges $895.00 and tries to throw it on your finance agreement. I am still so aggravated that jerk thought he could sneak that past me, it makes me wonder if there was sign on my forehead that said "stupid"?

Second, if you are so upside down between your finance agreement and what the car is worth, you probably made an incredibly BAD deal. You can't trust a car dealer to be looking out for your interests, they will clean your pockets out of everything they can get. You have to examine every line on the contract and finance agreement and understand what you are getting charged for.

In a conversation with one of our drivers this past week, he told me about buying a new vehicle and falling for the exact same thing. He never realized what he was signing for until after the deal was done. By that time it was too late and it cost him thousands.

Don't become a victim!