erbee
Senior Member
- Joined
- Dec 10, 2016
- Threads
- 17
- Messages
- 1,514
- Reaction score
- 1,074
- Location
- Orange CA
- Vehicle(s)
- 1999 Nissan Altima, 2004 BMW M3
Insurance companies pay "actual cash value" which will almost always be less than invoice price on a brand new vehicle.
GAP insurance pays the difference between the actual cash value (as determined by the insurance company) and the loan balance.
The insurance company(s) don't care about MSRP or ADM when determining the actual cash value.
If a person pays $45K for a Type R and manages to finance 100% of that amount and immediately totals the car, the insurance company will pay $30K with the buyer being responsible for the additional $15K unless they gave GAP insurance.
If a person pays $45K for a Type R and pays $15K down and finances $30K and immediately totals the car, the insurance company will pay $30K and the buyer loses their $15K.
In other words, don't pay ADM and don't crash your car.
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