Year-end car sales drive need for GAP auto insurance
Here’s something to look forward to as December closes out: An end to all those back-to-back TV commercials for new cars. (Goodbye to the holiday jingles featuring a certain crooner from the ’90s…) Continuous car ads must be paying off. According to The Detroit Bureau, an automotive news source, U.S. consumers will spend more than $34 million this month on new vehicles. Automakers have a lot of incentive offers available right now, so if you’re in the market for a new car, you also have incentive to review your auto insurance policy.
Before you select a new car, it’s a good idea to consider the cost of auto insurance for different makes and models. Some cars are less expensive to repair than others; some have better safety ratings. The Insurance Institute for Highway Safety gives safety awards for vehicles based on how well cars and trucks protect occupants in a crash. This is must-know information for many people.
Decades ago, when son #1 was born, we learned that my cool, sporty car was poorly rated for crash worthiness. It was promptly traded for something safer, and my auto insurance rates dropped. That helped me come to terms with the fact that I was “mini-van age….”
Car buying tip: Call your auto insurer and ask about GAP insurance. The car dealer will try to sell you this coverage, but it’s cheaper if you get it directly from the same insurance company that covers your vehicle.
GAP stands for Guaranteed Auto Protection, and the acronym actually explains what is does. Everyone knows that the minute you drive a car off the lot, it loses value. What many people don’t know is that if the car is totaled while it is still fairly new, your regular car insurance pays the depreciated value of the car — and that could be less than you owe on it. GAP insurance fills the gap. Your auto loan may require this coverage, and almost all lease contracts include it. Yet, buying it from the auto dealer or leasing company can cost you at least three to four times more.
If you are financing a vehicle and made a small down payment, you may need GAP insurance. Call your auto insurer to find out the cost and if this coverage is a good idea for you.