Did you know that when you drive your new car off the lot, the value of your vehicle immediately goes down, sometimes as much as 20%-30%.
Let's say that you paid $20,000 for you new vehicle and you have an accident a month later, and your vehicle is totaled in the accident. Maybe you made at the most one payment and if you did not put very much money down, your loan amount is still close to the $20,000 purchase price. Especially considering that you would have financed the tax and other fees.
Unfortunately, even with full coverage on you car insurance, which includes comprehensive and collision, you will only receive the fair market value of your vehicle which could be as much as 20%-30% ($4,000 - $6,000.00) lower than the purchase price.
That means you may be stuck paying that 20%-30% ($4,000 - $6,000.00). On a $20,000 car. Just a 20% depreciation on that vehicle would be $4,000! That amount could be more if you financed your taxes and license into your loan.
If you have purchased Gap insurance with your current insurer, it would insure you for the difference between the loan amount on the car and the actual fair market value. But, not all insurance companies offer Gap insurance.
Gap insurance can also be purchased seperatly from other insurance companies than the one insuring your vehicle.
Following are the most frequently asked questions about Gap insurance:
What is Gap insurance? Gap insurance will insure a vehicle for the difference between what is owed on it and what an insurance company determines to be the fair market value of the vehicle. A very cost effective way to financially protect yourself from a total loss when buying a new car is to purchase Gap insurance.
Is Gap insurance required on all new vehicles? No.
Can I buy Gap insurance for my older vehicle? Gap Insurance is available on new, used, and refinanced cars, trucks and SUV's purchased or refinanced within the past 12 months.
What does Gap insurance cover? The difference between the actual cash value of your car and the balance on your car loan is called the Gap. If your car is stolen or declared totaled, your auto insurance company will pay you the actual cash value of the car. Without Gap Insurance your lender will hold you responsible for paying the Gap (difference). The net effect is that you will have to come up with hundreds or thousands of dollars to pay off that debt.
Does my leased car automatically come with Gap insurance? Frequently, Gap insurance is built into the lease rate but don't assume it is since every lease is different.
Will the dealership offer me Gap insurance when buying a new car? Yes, most dealerships offer Gap insurance but usually at a higher cost. Before you decide to buy additional insurance, make sure you are not already covered by your current insurance policy. Before buying a new car you should call your current insurance company to see if they offer it.
The lower body panels are typically the dirtiest and should be cleaned last. Meg receives first party benefits which are mandatory coverage and vary from state to state under the no fault system. Where the big difference comes in is in the Liability for Bodily Injury or Property Damage to others that the "MOTOR" vehicle might occasion. It's like buying your R.V., you could get one from the local used car lot or you can deal with a major R.V. Policyholders in add-on states receives reimbursement for their losses from their own insurance company, but they are also allowed to sue the other policyholder at fault in the accident without restrictions. I gave up, insured the Silverado with them at a fantastic rate but paid full retail for my fiver at a "Specialist" Company. With the fiver, you will also have a standard auto policy to cover your truck, and it will cover all "rolling" liability issues. Homes, and especially the contents within the homes, are at risk for vandalism and theft, too. Homes, and their contents, are expensive investments, so you can imagine repairing or replacing them is expensive, as well. What stops people from purchasing gap insurance isn't usually the cost of the coverage, but their relative ignorance that it even exists. Think traffic volume and crime rates and you'll get the picture in a hurry. This is especially true if your waterless product contains wax, which can lead to smearing. The lower body panels are typically the dirtiest and should be cleaned last. Avoid using below freezing temps, many of these products are water-based and will freeze on contact. Waterless car wash products which claim they can "do it all" I would approach with skepticism. There is major differences to covering a Class "C" and a Fiver. Homes, and especially the contents within the homes, are at risk for vandalism and theft, too. What stops people from purchasing gap insurance isn't usually the cost of the coverage, but their relative ignorance that it even exists. Several industries, particularly the insurance industry favors this system because it lowers legal fees which account for up to 15 percent of the cost of auto insurance. If youre unsure on an area to use the product on, test first with a small spray in an inconspicuous area. Why go to a "Specialized Company"? Well would you get your annual medical at a Dentist or eat steak at a sea food restaurant? Yeah, I guess you could but you would be better served at a diagnostician and a steak house. One is a self propelled motorized vehicle while the other is an attachment to a Motor Vehicle.
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