Buying a new car is always an exciting, but tense, experience. That's because you're just waiting for the first moment that it runs into something. And even a minor accident can impact its value heavily. Therefore, it is critical to get total loss coverage and gap protection whenever you buy a new car fresh off of the lot. It can really keep your investment as safe as possible.
Even a Minor Accident Can Devastate Your Car Price
The old saying goes that new cars suffer minor fender benders the moment they leave the lot. While there's no statistical evidence supporting that claim, when it does happen, it can be a problem. For example, even a minor accident can decrease the value of your car by making it less pristine.
However, more serious collisions can also impact its value. For example, major accidents may cause what is known as a totaled situation. This happens when the value of your car is not worth the price to pay for its repairs. Thankfully, you can get high-quality total loss insurance to protect you if your new car is somehow totaled too soon.
Most Total Loss Coverage Should Help
Total loss coverage is a type of insurance policy that pays you money based on the value of your car. It only goes into effect if your car is totaled in an accident. Thankfully, a brand-new car will typically provide you with the kind of value that you need to get a great new car to replace it.
That said, there is a possibility that your vehicle may fall through certain gaps in your coverage. For example, the market value can be based on factors you might not expect, such as previous accidents. Those minor dings will drive the value down and may make it hard to replace your vehicle. However, combining total loss with gap protection should avoid this situation.
Gap Protection Keeps You Safe
In the rare situation that total loss coverage doesn't pay for an adequate replacement for your newly purchased vehicle, gap protection can help. That's because it is designed to increase the value of your collision insurance and to overcome the gaps in coverage that may occur.
For example, let's say you buy a $50,000 car and drive it a year before totaling it. During that year, expect the vehicle to drop at least $5,000 in value. And if you suffered any other type of damage, another $2,000-5,000 may disappear. So, unfortunately, your total loss insurance will cover that $40,000 replacement instead of the $50,000 you originally paid.
However, if you talk to an insurance agent and get gap protection, you can cover that extra cost and get the vehicle that you deserve. Gap protection can pay that extra $10,000 and replace your $50,000 vehicle with the same one that you bought, therefore saving your investment and avoiding costing you money. It is particularly critical for people who just bought a new car and who don't want their credit to be affected.
To learn more, get an insurance quote today.Share