Gap Coverage

Well, our bank that holds the loans for the Jeep and the Miata has decided to throw one more wrench our way. This will be the last time we do business with them, as the process to get the Miata taken care of was a nightmare.

Basically, we finalized the loan on the 20th. Signed all paperwork, got the cashiers check. This included accepting their offer for gap coverage, and signing the form saying that we accepted it.

NOW, they're saying that they actually couldn't offer gap coverage on the Miata, and sent us a form to sign to waive gap coverage.

1) Why can they offer gap coverage on our Cherokee, which is a 2000 model with a 2 year loan, but can't on the Miata which is a 2004 model with a 3 year loan?

2) Because the loan has already been finalized and we signed the form to accept their offer of gap coverage, could we just not sign the waiver form and pretty much "force" them to offer it, since the original signed form could be viewed as part of a "contract" in the loan?

I'm unsure if we would have bought this car if gap wasn't available. Internet legends, myths, etc.... but this is a Ti Gray car, and if "the curse" strikes, i'd like to have my ass covered. This seems really shady that they would try to alter the loan terms AFTER it was finalized and disbursed. (Gap coverage cost rolled into monthly payments @ $17/month.)

GAP only covers you if it's totalled and insurance values it at less than your loan amount. I don't know the Ti Gray Miata myth but if you have an agreed value policy on the car (highly advisable because of the mods) you should be fine without GAP.

pigeon wrote: GAP only covers you if it's totalled and insurance values it at less than your loan amount. I don't know the Ti Gray Miata myth but if you have an agreed value policy on the car (highly advisable because of the mods) you should be fine without GAP.

I don't have an agreed value policy on the car, but that's a good point i guess.

I know the car is worth MORE than the loan amount right now, but it might not be in 2 years, which was my only worry.

And i'm worried about fighting with insurance over "just a 7 year old Miata."

So basically... you think i'm probably just overreacting in this instance, and should get ahold of the insurance company to check into changing the policy before i play hardball with the bank? I can roll with that.

I'm really more annoyed at the bank for not doing their homework ahead of time and now trying to change the terms after the fact, when i'm pretty sure we don't have to sign anything further if we don't want to.

Oh, and the "Ti Curse" basically says that every Ti Gray car ever, will be totalled.

http://www.google.com/#sclient=psy&hl=en&source=hp&q=miata+ti+curse&pbx=1&oq=miata+ti+curse&aq=f&aqi=&aql=&gs_sm=e&gs_upl=559l2384l0l2476l16l10l1l0l0l0l228l1059l5.3.1l9l0&bav=on.2,or.r_gc.r_pw.&fp=26e57aa7900464a7&biw=1243&bih=332

glad I got cheap cars that i pay cash for - this and all this inusrance stuff is just mind blowing...do they charge you for this gap stuff??

Don't sign the waiver.

If it was a term of the original loan, not really sure how they can back out of it without a legal hassle.

If I don't pay cash I get gap. I'd do my best to get the gap. We lost quite a bit of money at the beginning of our relationship when Wifey's Cobalt got hit and runned. Blessing in disguise though. She drives a Ford now.

pigeon wrote: GAP only covers you if it's totalled and insurance values it at less than your loan amount. I don't know the Ti Gray Miata myth but if you have an agreed value policy on the car (highly advisable because of the mods) you should be fine without GAP.

Actually is it less than the original loan amount? Or less than the remaining balance?

If it's less than the remaining balance, then gap will be pretty useless in this case. It'll be down to $7k balance a year from now, car value still probably at $11-$12k.

N Sperlo wrote: If I don't pay cash I get gap. I'd do my best to get the gap. We lost quite a bit of money at the beginning of our relationship when Wifey's Cobalt got hit and runned. Blessing in disguise though. She drives a Ford now.

Was this because the Cobalt was depreciating faster than the loan was being paid down?

GrantMLS wrote: glad I got cheap cars that i pay cash for - this and all this inusrance stuff is just mind blowing...do they charge you for this gap stuff??

Yeah, gap insurance was $17/month if i rolled it into the loan, which i did.

Remaining balance I believe.

Mostly for people who buy new cars on long notes, then wreck within in a year or two when they still have no equity.

So from what i understand, it only makes sense when the car depreciates faster than the loan balance is reduced. (And i have equity NOW.)

So i REALLY don't need it on this car, and now i'm a little mad at myself for getting it on the Cherokee.

Well, at least this saves me $17/month!

yes, only important if you owe more than its worth. I didnt get it on my new car 2 years ago.

I still owe on the car, but a lot less than the current market value of the car.

yeah, GAP coverage is really useless unless you're in over your head (ie: zero down, no payments for 3 months deals) and buy a high-depreciation car new.

mazdas kinda are high depreciation cars but you bought this one lower on the curve. i have always had people try to sell me gap coverage when its not needed, like when i had a 13k trade plus 3k down on my ms3, not going to ever be upside down on that one. same deal with my xterra, i think the balance is under 7k ATM on a 2010 MY...

you have no need for gap coverage IMO

92CelicaHalfTrac wrote:

N Sperlo wrote: If I don't pay cash I get gap. I'd do my best to get the gap. We lost quite a bit of money at the beginning of our relationship when Wifey's Cobalt got hit and runned. Blessing in disguise though. She drives a Ford now.

Was this because the Cobalt was depreciating faster than the loan was being paid down?

Yes

Call your state's attorney general first thing tomorrow morning, then your state's bank commission/oversight board. Does another bank own the bank you're dealing with? I thought mine was a local bank. Wrong, owned by UBS....which can change things quite a bit for you. Big banks don't like it when the little bank they own are screwing around.

It's First Merchant's bank, and i think it is part of a slightly larger conglomerate, but they're no juggernaut.

This thread made me realize that i don't need gap, so i'm ok with what's going on i guess. It would have been another scenario if i still wanted gap coverage.

Regardless, i'm paying off these loans as quickly as possible and never using these guys again. They're seriously inept and the loan officer can't seem to bother to ever be in the office.

92CelicaHalfTrac wrote: Oh, and the "Ti Curse" basically says that every Ti Gray car ever, will be totalled.

I had not heard of the Ti curse but back in the day, when Mazda introduced the 4th color for Miatas (sliver stone), the conventional wisdom was that it was risky to have such a low car (which is already hard to see) in a color that looked so similar to typical pavement.

jrw1621 wrote:

92CelicaHalfTrac wrote: Oh, and the "Ti Curse" basically says that every Ti Gray car ever, will be totalled.

I had not heard of the Ti curse but back in the day, when Mazda introduced the 4th color for Miatas (sliver stone), the conventional wisdom was that it was risky to have such a low car (which is already hard to see) in a color that looked so similar to typical pavement.

Same deal here... a quote that stuck with me was "You DID want an invisible car, right?"

Did you check the paperwork you signed that suggested that they can back out of any of the conditions and/or that they're still subject to acceptance by someone else?

I wouldn't just sign the waiver, and I'd also complain my way up the food chain at the bank given the mess their process seems to be.

BoxheadTim wrote: Did you check the paperwork you signed that suggested that they can back out of any of the conditions and/or that they're still subject to acceptance by someone else? I wouldn't just sign the waiver, and I'd also complain my way up the food chain at the bank given the mess their process seems to be.

Honestly i didn't bother checking it last night once i realized that gap was pointless on this car.

I'll try to remember this weekend and see what we come up with.

Not sure if i'm going to bother complaining... i'll just let them know how i feel with my wallet and give them no further business after i pay the loan off a good year+ ahead of schedule.