My NX F Sport is planned to arrive this week and seriously thinking of getting GAP insurance. This car is to replace a 2014 RDX that was totaled in an accident. Realized we only got the current market value for the RDX in our region. So figured we should invest in GAP insurance on our next vehicle. My insurance company (GEICO) does not offer GAP so if we want it we will either have to purchase from dealer or switch insurance companies. Anyone have any experience with GAP insurance from Lexus? Thanks.

 

GAP insurance only factors into how much you put down on the car.

If the car costs: 45K OTD:

1. If you put down very little, say 5k, you owe 40k on the car. Next year, that car you paid 45k for, is now only worth 35k, but you also owe 35, so you would break even on an accident. HOWEVER, another year later, that car is now woth only 29k, and you still owe 30k. Now you won't have enough to pay that back without dishing out your own cash. Thus, GAP insurance would make sense.

2. If you put down quite a bit, say 12k, you owe 33k on that car. At that second year, assuming 5k off your loan a year (i'm making up a story...so bare with me), you owe 23k on a car that is worth 29k, and you would actually get to keep 6k after paying off the car. Thus, GAP insurance doesn't make sense. You'd essentially be paying more a month to your car insurance without any benefit since you paid so much up front.

Thus, it all depends on how much you're willing to put down on the car up front. It also helps to know how your car is going to depreciate over time (whether its fast or not). That can also factor into the discussion.

Personally, I don't like putting down any less than 10k on a car, so that GAP insurance will never be needed. Now of course that changes with the car's price, like 10k wouldn't matter at all on a GT-R (at 101k), you would then have to look at a downpayment of 20-25k to justify ignoring GAP.

 

Thanks Swacer! Since I put down $14.5k and Lexus hold value very well, I passed on the GAP insurance.

 

A friend of mine recommended Geico's Medical Breakdown Insurance (https://www.geico.com/getaquote/auto...own-insurance/), and that's what I have for my NX. It's available for new or leased cars which are less than 15 months old and with less than 15K miles. The coverage is up to 7 years or 100K miles.

 

I agree. This insurance is for the medical bills you sustain in the event you have a breakdown when your NX is damaged.

 

For a brand new vehicle like the OP's, I consider this a waste of money. This is just the insurance industry getting into the whole "extended warranty" shindig.

Besides, much of what they cover is already covered by your cars warranty.

 

Wrong! Geico MBI is an insurance against mechanical problems [with a short list of exclusions], a deductible per occurrence of $250 and can run up to 7y/100k miles. I have it for my X3


EDIT: I understand now that this was a joke. My bad