Alan
Akron,#2Consumer Comment
Mon, April 10, 2006
The extended servies that a dealership's F&I department offers aren't always a waste of money, and/or just a way for the dealer to gain extra profit. Credit life, I will admit, is a waste of money. There are much cheaper life insurance policies out there. However, I've seen people save thousands of dollars in vehicle repairs because they bought an extended warranty. Sure, Guy #1 may spend $900 on a warranty and never have an issue with his vehicle, while Guy #2 spends the same money and it saves him from paying for a $3,000 transmission repair. You never know what, if anything, might go wrong with a vehicle. Whether they are American or Imports, they all have one thing in common: They're all built by humans. You don't plan on being involved in an automobile accident, but there is a chance it might happen, that's why you pay for insurance. As for gap insurance, it depends. If your vehicle is stolen, or wrecked and considered a "total loss," your insurance company will write you a check for the Retail Book Value of the vehicle. This value has nothing to do with how much you still owe. If you pay cash for a vehicle, there is no need for gap insurance. If you finance a vehicle, and put a decent sum of money down, there is no need for gap insurance (unless you purchase a vehicle with a poor depreciation rating). If you finance a vehile, and don't put any money down, or even worse, finance the negative equity from your trade-in, gap is almost a must. Example: You currently own a 2001 Volkswagen Jetta, you still owe $9,500, and the trade-in value is $7,000. That $2,500 difference is added to your new loan. Dealers will say they are "paying off your car," which technically they are, but it's still added to your new loan. You trade your Jetta in on a 2005 Nissan Maxima. The sale price of the Maxima is $28,000. After your negative equity, the sale price becoms $30,500. After all taxes and fees you are at about a total financed amount of $32,500. Retail Book Value on this car would be around $25,500, and that's generous. If you total the vehicle, or it is stolen, your insurance company will send you a check for $25,500. So what happens to the other $7,000 that you still owe? You are responsible to come up with the entire amount within 30 days. With gap insurance, the lender will cover the entire gap between the book value and what you owe. I've seen it happen a number of times, people with and without gap. Just some friendly advice.
Bro
Texas City,#3Consumer Suggestion
Tue, March 28, 2006
They already got you man. You should never ever buy extras because they are not what you think. It's just extra $$$ for the dealer and a waste of $$$ for you. The F&I guy or gal already made his kick backs from these companies. Sorry man