State Farm Payoff Protector

Does anyone have State Farm "Payoff Protector?" Apparently it's like GAP insurance, but it's not insurance. Can someone explain it to me if you have it and had to use it when your vehicle was totalled and still owed after the claim was payed?

 

Your insurance GAP policy is always better than what they offer at the dealer.

If you total the vehicle, and owe more money than what the vehicle is valued at, the insurance will pay the difference. If you didn't have the GAP, you would have to take the insurance money and pay out-of-pocket for the difference.

 

https://www.statefarm.com/finances/banking/loans/payoff-protector

Insurance products that if one needs they shouldn't own the vehicle in the first place. I'm sure it makes sense for people who've rolled other car loans in with a bad trade or bought a vehicle that depreciates really bad with nothing or little down.

 

I had a co-worker benefit from this. His dodge was 4/6 years paid off, had replacement insurance. The truck on paper was only worth 28,000 but the purchase price was 45,000.

The insurance is adjusted to pay off the vehicles MRSP or Sale price (whichever is lower) during the span of 4-5 years.

He got 45k instead of the depreciated value.

Edit: This wasn't gap, this was a 43R Depreciation Waiver Cover Which is Canadina only it seems.

 

These products are only really useful to me in the first year of ownership. Not interested in coming out of pocket thousands more for a larger downpayment when I don't have to. Each person makes their own financial decisions their own way, and that's ok.

Really I was just trying to figure out what the heck State Farm Payoff Protector really is... I'm thinking you have to use their auto loans to have the payoff protector. Otherwise, it doesn't make sense.

One other question, anyone recommend a GAP policy other than what the dealer offers? I see a suggestion for buying from my auto insurance provider.

 

The State Farm protector is a free service that is included with each vehicle loan. We (I work for SF) also do financing on vehicles so it is a little bonus to bring people in the door. Obviously I have this on my 17 Tacoma but hope I never need to use it.

 

Thank you!