last911

John Simcox

There is often a disparity between what an insurance company will pay for a car (or indeed the trade in value) and what might be owed on a finance as the finance assumes linear depreciation (ie each month you pay off the same amount of capital and interest) whilst car depreciate in a very non-linear manner.

Don't know if it is offered in the US but here in the UK we have something called GAP Insurance which allows you to insure the difference between the value paid by the insurance company in the event that is written off and what you owe on any outstanding finance and in some policies it is actually back to invoice (O to have a car written off just before the finance comes to an end with one of those policies!)

Comfy

Thanks

BetterThanVW

We did that to my buddies GMC Sonoma truck a few years back. Took the plugs out and let the starter crank the motor and spit the water out of the plug holes. Put em back in and fired it right back up. Well maybe we let the plugs dry and sprayed some ether in there I don't recall exactly. The point is he drove the truck for years after that. I know these cars are more complex but what would physically break from the water that it would ruin the motor? I don't get it...

snagitseven

Most leasing companies in the U.S. now include GAP (Guaranteed Asset Protection) coverage in their leases as does Audi Financial Services.

Richard Solomon

Water is much less compressible than air or air/fuel mixture... I saw a hydro-locked engine which threw a rod out the bottom/side of the block.

So: valves, pistons, connecting rods, block, head, gaskets....probably more stuff could physically break.

Alphatero

Yes, but that's to protect themselves from someone walking away from the lease after an accident

There is no such automatic protection for cash buyers or those who finance. You have to seek out such coverage and it is not always readily available. Nor do the dealers mention it during the 3 hour "closing" process. (But they do mention tire insurance, bras, extended warranties, etc - aren't they nice?)

snagitseven

Actually, GAP coverage is to protect the lessee from having to pay out an excessive lease balance which is almost always greater than the value of totaled car. The lessor's protection is provided by the lessee's insurance policy in the event of a total loss.

GAP coverage would not be relevant to a cash buyer as the car would not have an owed balance to a lender. The owner's insurance coverage would (usually) provide coverage for current value.

John Simcox

Here in the UK selling GAP insurance is major money earner for the dealer so is pushed heavily along with tyre and wheel insurance and specialist paint protection. Audi wanted over £500 to cover my car for up to £15000 of difference for 4 years. I got the same level of cover via a third party for £150 and it was transferable should I change car before the 4 years was up

Alphatero

Protect the lessee? I don't think so. How many lessees readily write a check to the leasing company for $10 grand or more? They walk away and wait to get sued, IF they have any assets to come after. The reason that leasing companies "magnanimously" include GAP insurance is to protect THEMSELVES from such occurrences and insure that THEY get paid.

You may be right that cash buyers aren't eligible (I never asked), but they still face the same nightmare when the insurance company hands them a check for thousands less than the value of the car that they now have to replace.