Buying a New Car? You May Need Gap Insurance
If you are taking out a loan to buy a new set of wheels, you may need to buy additional insurance if you owe more than your car is worth. Guaranteed auto protection insurance pays off the full amount of your loan, if your car is stolen or totaled in a crash. Remember your new vehicle’s market value decreases about 20 percent as soon as you drive off the dealer’s lot. This means if you made a low down payment, it is likely your loan could be greater than your car’s value for a few years. If you think you need gap insurance, ask about this option when you apply for auto insurance quotes.
Car depreciation
Your car’s value depreciates as soon as you drive it off the lot, but it continues to fall significantly for the first two or three years. If your car were to be stolen or totaled during this time, your insurance company would pay you the actual cash value of your car. If you owe more than that amount on your car loan, you will have to pay the difference. To find out how much your new car will depreciate in value, check out Edmunds.com. If you think you will need gap insurance, make sure you ask about this additional coverage when you get auto insurance quotes.
New policy
Before you buy a new car, contact your insurance agent or your insurer to find out if you can add gap insurance to your current auto policy. Some insurance companies offer gap insurance as a rider to an existing policy. In some states, insurers may automatically include gap insurance when a customer purchases a new car. Buying gap insurance from your current auto insurance company will make it easier for you, in the event you have to file a claim. Instead of filing separate claims with two different insurance companies, you can file one. If you need to buy gap coverage, get several auto insurance quotes for the best price.
Dealer’s offer
When you buy a car, the dealer will usually offer gap insurance. The cost is often rolled into your monthly car payments. Although it is convenient to buy the additional insurance from the dealership, it will often be more expensive than if you bought the policy on your own. Gap insurance generally costs less than $100 per year. Turn down your dealer’s coverage, until you have received other auto insurance quotes. You can always go back to your dealership and add gap insurance on later. When you shop around for gap insurance, carefully review the policy for any exclusions.
When you are ready to buy a new car policy, you can call agents in your local area, contact insurance companies directly or use InsuranceQuotes.com to instantly get competitive auto insurance quotes from the nation’s leading insurance providers. Simply fill out an online form on InsuranceQuotes.com to find the right insurance coverage at the best possible price in minutes. Take the time to protect you and your family today.
