Car insurance is one of the first items addressed when you purchase a new car. In Connecticut, a minimum amount of insurance is required of all vehicles on the road.
With a new car, you likely will want more than the minimum basic coverage. If your vehicle is damaged in an accident, the last thing you want is a policy that requires you to foot the entire repair bill.
Likewise, you want enough bodily injury liability, personal injury protection, and property damage liability. You pay enough for a new car without worrying that an accident can leave you bankrupt.
As good an investment as these coverages are, you may want to consider Gap insurance to fully protect your new ride.
GAP Car Insurance Safeguards You Against A Total Loss
Why buy a new vehicle? The “experts” say your purchase begins to depreciate as soon as you drive off the lot.
While this is true, new vehicles provide several benefits. They come with the latest technology. You can be more confident in a new vehicle’s reliability. Many have comprehensive warranties that cover basic repairs and maintenance.
Even with all these benefits, a vehicle with substantial to 100% financing is often worth less than its loan shortly after purchase. In the event of a total loss, most auto insurance policies will pay up to the cash, or Kelly Blue Book value of a vehicle. This is not the same as the amount of the loan.
Depending on the type of vehicle you purchase and how you pay for it, Gap car insurance may not be necessary. If you purchase a vehicle with cash, or make a big down payment, the additional coverage may be an expense you don’t need.
So, how do you know if Gap insurance is necessary? Is it just another way for the dealership to get more money out of you?
The Insurance Information Institute (III) suggests purchasing GAP insurance when you:
- paid less than 20% down
- financed for more than 60 months
- leased a vehicle
- bought a vehicle that depreciates faster
- rolled negative equity into a new car buy
Most dealerships offer to sell you GAP insurance as part of your financing package. However, you may get a better deal adding it to your auto insurance policy.
For 50 years, the Keating Agency has been a local, independent agency dedicated to looking out for the best interests of our clients. We work with more than two dozen companies, which allows us to help you find the right policy at the right price. We aren’t interested in selling you a policy you don’t need.
So, if you are looking to buy a new car and have questions about Gap insurance, give us a call. We’re happy to answer all your questions. We’ll make sure you have the information necessary to make the best decision.