Expert: Ron Cercone - 2/16/2009

Question
Hi there:

I'm purchasing a 2008 Ford Focus SE from Carmax today and since they don't offer separate GAP policies, I need to purchase one online.  Do you know of any good plans reasonably priced I can purchase online?

Answer
Hi Tom,

This won't answer all your question, so you can repost your question.

In my opinion from a claims perspective, a GAP (Guaranteed Auto Protection) can be a waste of money. You have to look closely at what your GAP covers. Is it to cover the difference in the "balance owed" on a loan and the insurer's valuation of a total loss vehicle? Or is it to cover the difference in the cost of a new vehicle and your "just driven off the lot" vehicle that the insurer puts a lower value on? GAPS are for people who don't have the discipline to pay off a car loan according its depreciation rate, or who spend beyond their means. (But thats just my opinion).

Better to go with an underlying "quality" insurer than an el cheapo insurer. You can see recommended insurers, from a claims paying perspective, at www.insuranceclaimhelp.org.

In any case, the insurer does owe you for equivalent to what you had. So call the adjuster's bluff and say "OK, I just bought this car and it only has 250 miles on it, but you want to take $2,000 off the new price since its not on the lot. You, Mr. adjuster, find me another car with 250 miles or more on it and get it delivered here. I will even take a car with more miles on it, as long as you compensate for the difference in miles."

If you have your heart set on buying a GAP policy, I can't help you choose a company. I have never handled a GAP claim. I can't tell you who is good on claims and who is tight. And I can't tell you who is expensive and who is cheap on premiums. My expertise is in claims. You need to shop with an agent.