A Tesla Cybertruck owner shares his truck was totaled after it was sideswiped by an E-scooter. However, the insurance company is only offering to pay him a “fair market price” of $77K, even though he paid $198K for the truck and still owes the bank $171K.
That is the reason GAP insurance coverage exists. Deciding to skimp out on your insurance coverage when buying an expensive vehicle is stupid. Play stupid games, win stupid prizes.
~~ I wonder if Tesla’s in house insurance even offers gap insurance lol ~~
Edit: article says he has Allstate so never mind
Even if he has Allstate, this is a good question about Tesla’s in-house insurance. Or maybe Allstate didn’t offer it for the Cybertruck, obviously they shouldn’t have if they did. That 100% would have been a losing product and insurance companies don’t do that.
Alternatively, it means that the car purchase was done without enough money for the down payment and therefore maybe the buyer couldn’t actually afford the car. With a solid down payment, you should never have to be underwater on the auto loan in the first place. You can plan to stay ahead of the depreciation over the life of the loan because you already paid for the drop in value.
With too little down though, gap coverage is a must.
To be fair that is assuming an average amount of depreciation and not over paying for the vehicle to begin with.
Yeah, great point. If I paid $100 for a rock it doesn’t make the rock suddenly become worth $100 to the rest of the market.
He might have thought it would actually go up in value due to demand and financed the whole thing.
I’m no expert but treating a car as a financial investment device seems unwise outside of the savviest of classic car owners.
Yeah but it’s on point for the sort of Musk bro who’d pay that much for a Cybertruck.
Think of it like scalping a gaming console.
Down paymeny? No. He had to have rolled over negative equity into the loan.