Gap insurance on BMW lease
- Thread starter Somefakename
- Start date
I've never seen gap insurance provided by the lienholder. It's an insurance policy for you, the consumer.
For example, let's say you lease the car for 48 months and after 24 months your remaining principle is $15,000. At this point you wreck the car and insurance pays you (actually pays the lienholder, BMW Financial) $8,000, claiming that is what the car is worth. You are then on the hook for the unpaid balance, or $7,000.
Gap insurance is an insurance policy you buy to cover your ass in case the above scenario happens to you. On my $30,000 lease gap insurance was a whopping $400, or $8.30/month for 48 months. Definitely worth it. If you wreck and can't afford to pay the leftover gap (and they usually want a lump sum payment), then the lienholder will just pursue you for the money you owe, plus interest, plus late fees, plus collection fees, etc. It's a contract that you have to honor.
Another bonus of gap insurance is that you can max out your deductible on your regular car insurance policy if you want. If you wreck your car, your deductible will be deducted from the total payout, but who cares if they deduct $1000 when you have gap insurance....the whole gap is covered.
In February I wrecked my Land Rover. Insurance company totaled it. My principle was $12,200 and the blue book was about $7,000. I didn't have gap insurance and I almost took it in the shorts. After a lengthy battle with the insurance company, I was able to prove to them that the fair market price of the truck, including all the off-road modifications, was much higher than blue book. More than twice blue book, in fact. I walked away with the full note paid off + $2000 cash (insurance paid off BMW Financial, by the way - BMW owned Land Rover when I purchased the Rover). I let the insurance company keep the $2000 cash in exchange for the wrecked Rover. I'm fixing it myself for much less than the insurance estimate. Now I have a nice off-road toy owned free & clear and a nice daily driver BMW at a killer interest rate due to my continued patronage of BMW Financial.
But after I almost lost big on the Rover wreck, I told myself I would always carry gap insurance.
P.S. I'm not an insurance agent...just speaking from my experience...please correct me if I'm wrong anywhere.
For example, let's say you lease the car for 48 months and after 24 months your remaining principle is $15,000. At this point you wreck the car and insurance pays you (actually pays the lienholder, BMW Financial) $8,000, claiming that is what the car is worth. You are then on the hook for the unpaid balance, or $7,000.
Gap insurance is an insurance policy you buy to cover your ass in case the above scenario happens to you. On my $30,000 lease gap insurance was a whopping $400, or $8.30/month for 48 months. Definitely worth it. If you wreck and can't afford to pay the leftover gap (and they usually want a lump sum payment), then the lienholder will just pursue you for the money you owe, plus interest, plus late fees, plus collection fees, etc. It's a contract that you have to honor.
Another bonus of gap insurance is that you can max out your deductible on your regular car insurance policy if you want. If you wreck your car, your deductible will be deducted from the total payout, but who cares if they deduct $1000 when you have gap insurance....the whole gap is covered.
In February I wrecked my Land Rover. Insurance company totaled it. My principle was $12,200 and the blue book was about $7,000. I didn't have gap insurance and I almost took it in the shorts. After a lengthy battle with the insurance company, I was able to prove to them that the fair market price of the truck, including all the off-road modifications, was much higher than blue book. More than twice blue book, in fact. I walked away with the full note paid off + $2000 cash (insurance paid off BMW Financial, by the way - BMW owned Land Rover when I purchased the Rover). I let the insurance company keep the $2000 cash in exchange for the wrecked Rover. I'm fixing it myself for much less than the insurance estimate. Now I have a nice off-road toy owned free & clear and a nice daily driver BMW at a killer interest rate due to my continued patronage of BMW Financial.
But after I almost lost big on the Rover wreck, I told myself I would always carry gap insurance.
P.S. I'm not an insurance agent...just speaking from my experience...please correct me if I'm wrong anywhere.
my gap is not through BMW - through a company recommended by the dealer - don't recall the name right now - will check paperwork and post again later.
tih2k, that is cool that it was included, and through BMW Fi. That gives you all the confidence you need! Although I'll bet that BMW Fi made sure you paid for it one way or another...![[;)]](/images/smilies/wink.png "Wink [;)]")
tih2k, that is cool that it was included, and through BMW Fi. That gives you all the confidence you need! Although I'll bet that BMW Fi made sure you paid for it one way or another...
I think you can get a better lease rate (money factor) any time you go with the manufacturers leasing, plus gap coverage.
Link with some info on gap
Link with some info on gap
Last edited:
now I better check to make sure the dealer didn't sell me double gap coverage....LOL
Mine is through Trans City Gap, administered by United State Warranty Corp, 22 N.E. 22nd Ave, Pompano Beach, FL 33062, 954-784-9400 / 800-432-4566
It's gap insurance coverage for the total outstanding balance, up to $100,000, in the event of "constructive total loss" which means 1) total cost to repair is >= actual cash value; 2) insurance declares it a total loss; or 3) stolen & not recovered in 30 days. Last point is important - don't leave a theft loophole where you end up with no car & no gap insurance payout.
Note: "This Gap Addendum is only available for purchase on the date of retail installment sale contract / finance agreement inception."
Mine is through Trans City Gap, administered by United State Warranty Corp, 22 N.E. 22nd Ave, Pompano Beach, FL 33062, 954-784-9400 / 800-432-4566
It's gap insurance coverage for the total outstanding balance, up to $100,000, in the event of "constructive total loss" which means 1) total cost to repair is >= actual cash value; 2) insurance declares it a total loss; or 3) stolen & not recovered in 30 days. Last point is important - don't leave a theft loophole where you end up with no car & no gap insurance payout.
Note: "This Gap Addendum is only available for purchase on the date of retail installment sale contract / finance agreement inception."
just found this on BMWUSA site.
http://fs.bmwusa.com/GapProtection.asp?Section=NEWCARS&SubSection=Lease¤tSection=VH
It states gap insurance is included on all leases.
http://fs.bmwusa.com/GapProtection.asp?Section=NEWCARS&SubSection=Lease¤tSection=VH
It states gap insurance is included on all leases.