Feburary 06, 2006

Dear Tony

I have been searching high and low for an answer to a simple question. Perhaps you can help. I basically need to know my rights when it comes to GAP insurance.

I never knew about it, until my car was totaled, and I had to pay $1,500 out of my own pocket! The car dealership where I bought the car claimed that my loan was too big to purchase GAP. Is this a load of BS or what?

Wouldn't I have had to waive my right to it when I originally purchased the vehicle?

I hope you can assist me in this manner. This month is apparently "lawsuit fever month" and I'm just wondering if I have to add one more to the list! Thanks for listening! I hope to hear from you soon.

Sincerely,

Beth

Answer:

Hi Beth,

First of all Beth I'm not a lawyer and I can't give you any legal advice.

Now having said that I don't believe that any states put car dealers under any obligation to offer you GAP, nor do you have to sign a waiver to refuse to purchase it.

Car dealers like to use the "waiver" thing when trying to get you to buy an extended warranty, but in fact it is only a sales ploy that gives them an opportunity to present the warranty to you. Then if you don't want it they make you feel guilty for not taking it by making you sign a waiver. In fact there is no legal obligation on either party.

It would work the same way if they did offer you a waiver to sign for refusing GAP. The only legal implication it would have would be for the dealer to protect themselves if somebody - like yourself - got the bright idea to sue them for not offering it.

The fact is that not all dealerships even offer GAP insurance.

As far as the loan being too big for them to sell you GAP . . . I never heard of that. GAP policies do have limits as to how much they will pay, but I don't think it has anything to do with the amount of the loan - except for maybe minimum amounts.

I hope this helps . . .

All my very best . . .

Tony Iorio