Extended Warranties and Gap Insurance, etc

I guess it depends on the loan term and amount, but to me, unless it was a lease, GAP insurance is not worth it. I think for ICBC for my Honda Pilot, it was like an extra $500 a year each year for up to 4 years. If something were to happen to my Honda Pilot, I could take the hit on depreciation since it's not that much anyways due to being a Honda Pilot.

Extended warranties are really piece of mind for yourself. Some people come out ahead, some don't so it's really up to you. If I were to get extended warranty, I also haggle down the price to get a good deal on it. It's like a gamble, the dealers in the long run always come out ahead, you are just betting on if you get lucky. Check the difference between buying now and couple years down the road. If the difference is not too much, then forego the extended warranty and see how the car performs, then get it later if you've been having a few repairs.

You have to do the math on everything. For warranty, the manufacturer is taking the probability of something breaking, taking that cost, adding a healthy profit, and charging you accordingly. So the odds of you getting "ahead" are quite slim. You're basically paying for the peace of mind, that the transmission doesn't go 5000km out of warranty and costs $5000 to fix. I think they are a scam but to some people it's necessary. Maintenance same thing. You could pay for a maintenance package all up front from a certain dealer but what happens if you move? Or if they have horrible service? Or you change jobs and it's a huge hassle to get the car there for service due to it being on the other end of the city? Again, I personally wouldn't bother.

For GAP insurance, I personally would get it unless it's super expensive. Let's assume you buy a brand new car, three months later it gets written off. You paid 30 grand for it brand new but is only worth 23,000 because it's now a used vehicle. But you didn't put any money down on the loan so you still owe 30,000. So not only are you in debt by a significant amount, you have no car and need the funds to get yourself another car. Bad spot to be in. GAP is a no brainer, I had a car that was leased and was written off at 18 months old. I got everything that was paid into the lease for that 18 months, so free car essentially.

I think Gap insurance on a lease is a must (and that's usually offered through the lessor, yes?) On a financed/purchased car, the ICBC Replacement Cost coverage is pricy, so I guess it's one of those toss-ups - do you want to risk being paid out less than you owe on a financed car, or taking a loss on a purchased car in the case of a write-off accident? Guess it depends how risk averse you are, how much of the car is owed to the bank, how quickly it's depreciating, and how you could weather that kind of financial setback. I was quoted $700 for a new compact SUV for the first year with ICBC (Replacement Cost coverage, not the Plus version or the Limited version), so it's a substantial cost... but knowing what Vancouver roads can be like on a dark, rainy day... hmm.