I recently purchased a pre-owned car at my local Car Max. I was determined to use USAA car financing, even though Car Max in-house financing was offering a slightly better interest rate for my current FICO scores (mid 800s). I was determined to use USAA because I knew that USAA offered GAP insurance for a very reasonable $269.00), and it was revealed to me (fortunately before I signed any documents) that Car Max no longer offers GAP insurance in the state of South Carolina, after the disasterous * year) flooding of a few years ago. I put the full amount of my trade-in down as a down payment to mitigate my car payments, and I felt good about using USAA, since I had used them several times before, and I knew how easy things would be.
Well, come to find out, I put TOO MUCH $$ down on my car purchase, and as a result, I was notified that my loan was "ineligible" for GAP protection because the LTV ratio (loan-to-value) was below 65%, and I therefore was not eligible for GAP protection. NO ONE At USAA told me this prior to my making the down payment. I expressly told the folks at Car Max "no thanks" for their lower interest rate because I KNEW that USAA would offer me GAP protection, something that Car Max had just walked away from. Now, I have a car financed (and insured) through USAA with NO GAP PROTECTION.
Had I KNOWN, (or been informed) that putting down the amount of money that I did would make me INELIGIBLE for GAP protection, I SURELY would have put less $$ down to meet the 65% LTV threshold to activate GAP coverage, that threshold of which I was ignorant.
Well, I won't be fooled again. This wasn't my first (or second or third) car financed thru USAA, but it will be my LAST car financed thru USAA. I suppose I'll have to go through the hassle of re-financing the vehicle with another bank to see if someone else out there offers GAP protection.
Not a way to go with a 25+ year customer, USAA!
Someone from the USAA CEO's office called me yesterday, and very patiently explained to me why GAP insurance on my car loan wouldn't make financial sense for me. My USAA insurance would take care of my car, should it be totalled in a wreck. In essence, GAP protection wouldn't have kicked in, since I'll always have more equity in the car than it's current value.
I very much appreciate the call from a product expert from the CEO's office, which restored my faith in USAA. They really do look out for their members, and that's good to know. It's also good to know that when they say they're going to call, they do just that. They called me and set things straight, and "fixed" my GAP insurance ignorance.
DRichmond, This is absolutely wonderful to hear. The financial security of our members is our priority and I'm glad we were able to restore your faith in us. Thank you for you membership and Happy Holidays! - Ben