[Mr. Mazak]

My dealer says that I'm next in line to order. I want a mid level Lariat. I told a friend that I was going to put about 40K as a down payment. He told me that with such a large purchase of about 85K, a down payment that large would hurt me if the truck was totalled or stolen. He says that my insurance would only pay what was left that I owed on the truck and I could potentially lose out on my 40K. He was saying to put down just tax and title and finance the rest, at least for first few years. I know this may seem like a dumb question but I wanted to hear if this made any sense.

Either way, I'm excited that I'm close to ordering.

 

[Leaf to Lightning : )]

he's full of it.... he's not an insurance agent, or insurance company - don't listen to 'talk' from someone who is just 'talking'... Insurance is insurance, it matters NOT 'how' you paid for your vehicle.

what he is probably referring to, is GAP insurance - which is ONLY for those who have FINANCED their vehicle, and the amount that they still OWE is more than the actual value of the totalled vehicle. Some finance companies or dealers will REQUIRE this as part of the loan. Some insurance policies will also provide this, for an additional charge.

 

[ChasingCoral]

My dealer says that I'm next in line to order. I want a mid level Lariat. I told a friend that I was going to put about 40K as a down payment. He told me that with such a large purchase of about 85K, a down payment that large would hurt me if the truck was totalled or stolen. He says that my insurance would only pay what was left that I owed on the truck and I could potentially lose out on my 40K. He was saying to put down just tax and title and finance the rest, at least for first few years. I know this may seem like a dumb question but I wanted to hear if this made any sense.

Either way, I'm excited that I'm close to ordering.

Have you considered asking your insurance agent?

 

[SkyMasterM]

as an insurance agent I can tell you he is full of it. The way insurance company's work is based on your coverage and the value of your vehicle at the time of an accident. If you have 100,000/300,000 coverage the insurance company will cover you for a max of 100,000 per vehicle. If your car is worth 60,000 the insurance company is only gonna cover you for 60,000 minus your deductible. If you owe more than what the car is worth that's where gap coverage will come into play.

 

[chillaban]

I think what your friend is trying to (incorrectly) describe is GAP insurance in an underwater situation.

For example if your truck is bought for $80k, it’s now worth $60k and you total it.

If your loan still has $70k and you have GAP insurance, insurance will pay out $70k. Otherwise insurance will only pay out $60k.

A lot of my richer coworkers who buy fancy cars swear by setting up their loans so they are perpetually underwater in this manner. Personally I don’t think you should plan for this. The chances that your Lamborghini gets wrecked to the extent it is totaled is already low. For a more repairable giant vehicle like a F-150, it seems even less likely.

 

[Voltz]

You may want to consider a full vehicle replacement cost coverage rider that will pay a named percentage over what you paid if the new vehicle costs more. There's a better name for it, but I can't remember it. USAA automatically offered it for 20% or 25% over cost when I insured the Lightning. It's similar to GAP insurance in that it covers the gap between insurance loss value and the cash you took out of your pocket instead of somebody else's.