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Extended Warranty and GAP Insurance

8.3K views 58 replies 17 participants last post by  dklanecky  
#1 ·
Do you have any recommendations on best places to buy an extended warranty plan and GAP insurance? Thanks!
 
#3 ·
Gap is a requirement for anyone financing a car. It’s not about not being able to afford it. All cars lose a lot of value. It’s about protecting your investment and loss of money if the car got totaled tomorrow and you don’t lose that difference on what is owed.

Extended warranty up to you. You can only buy gap from the dealer or the bank you finance with at the time of getting the loan.

Get the extended warranty from the contact on this site. Jennifer gets you a great deal on them. Search here and you’ll find her info.
 
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#6 ·
Gap is a requirement for anyone financing a car. It’s not about not being able to afford it. All cars lose a lot of value. It’s about protecting your investment and loss of money if the car got totaled tomorrow and you don’t lose that difference on what is owed.

Extended warranty up to you. You can only buy gap from the dealer or the bank you finance with at the time of getting the loan.

Get the extended warranty from the contact on this site. Jennifer gets you a great deal on them. Search here and you’ll find her info.
I was able to find Jennifer's contact in this forum and in a YouTube video as well.
THANK YOU so much!
 
#4 ·
Gap is only required if the value of the car is going to be less than the principal amount of the loan outstanding at some point during the term of the loan. Down payment is big factor, as is the length of the loan. Financing for more than five years increases the probability of there being a time when you owe more than the car is worth.

You may also be able to get gap insurance from your own car insurance company.

Extended warranty - you can buy the genuine Toyota Vehicle Service Agreement (VSA) from any dealer at any time after the purchase as long as the basic 3/36 warranty is still in effect. Once you hit the 3 years or 36,000 miles, you can't buy a VSA anymore. Otherwise, be careful with other types of extended warranties the dealer may offer. They may sound good, but they could have additional requirements such as having all work done (including oil changes) at that dealer.
 
#5 ·
So I'm a big advocate of GAP insurance. I usually get it through whomever I'm financing the car with. In my experience its a $100-200 cost but well worth it if you are financing any portion of the car. My 2017 Toyota Sienna was totaled while I was driving to work and was slammed into by someone going 50. This was in 2018 and unfortunately I would've been upside down on the loan and would've spent time trying to recoup that from the other insurance carrier, but with GAP my loan was paid and that was that, no matter what the value on the car was at the time. Your car insurance should also offer a solution to GAP as well. Again for the cost I recommend it. As for the extended warranty, this is the first time I've purchased it from the dealer mainly because the person I buy my toyotas from is family and I paid cost. I always go to the dealer for work though. This will be the first toyota I plan on keeping for more than 3 years (I like the new car smell....and may have a trade in problem) and I drive a lot, pre covid 20k-30k a year, so with my new Highlander baby, the fact that I'll be holding on to the car and that I drive, I thought the warranty, for what I paid for it, made sense. But like the other post said search around and talk to as many people as you can so you can make an informed decision on the Warranty. Knock on wood I never use it, but at least its there for peace of mind, which is what insurance and warranties are all about.
 
#8 ·
Thank you for sharing your experience and the importance of GAP coverage. I once had a 4Runner that got totaled in an accident and had to chew in a $2000 loss as I didn't have GAP coverage. Learnt the hard way. I bought a new Ford after that and the dealership charged me $850 for GAP coverage and convinced me to cancel the coverage from my progressive insurance policy by saying that the coverage by my insurance is only a 'baby GAP' and not a full GAP like the one that Ford offers. Not sure if this is a sleazy sales gimmick by the finance manager. Never heard of the term 'baby GAP'. I recently sold the Ford for it's poor reliability on the 10 speed automatic transmission and looking at Toyotas now. I will be getting a new Highlander/4Runner soon and I'm very thankful to this forum. What you say makes sense. Insurance/Warranties are for peace of mind and totally worth it for that alone! Thank again.
 
#17 ·
Percentage rate isn't a direct factor. You still don't need gap if you put down a reasonable amount of money with a trade or cash. But if you decide not to put anything down because it's 0%, then yeah, you'll probably want gap.
 
#18 ·
Not true. If you get into a wreck that damages the car but not total it the value drops just from the wreck. Then it gets totaled in another accident. The value then is less than what you owed. Either way even with a sum down it would have to be substantially more than just $6k down. More like $10-15k to not need gap.
 
#30 ·
Now I understand - we're mixing terms. Gap insurance is for when there's an outstanding loan on a car that gets totaled, and the amount owed is more than the amount that the car is worth. In that situation, gap insurance pays off the loan; it doesn't really pay you directly. New car replacement is similar but not exactly the same thing. New car replacement pays out whether there's a loan or not.
 
#36 ·
The only warranties you should ever buy are direct from the company, not 3rd party. You can do a search for the cheapest toyota extended warranties and find that Jerry Johnson at Midwest Toyota in Hutchinson, KS is one of the guys that offers the cheapest. You can buy from any dealer and typically if you work a great deal with your sales guy, they try to get you back on the warranty and other upsales
 
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