You Did Remember Gap Auto Insurance Quotes, Didn’t You?
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Auto Insurance Articles
By: Clifford F. Berman
Posted on: Jun 9, 2010 - 2:47:20 PM
You Did Remember Gap Auto Insurance Quotes, Didn't You?
Tie a string around your finger the next time you go shopping for auto insurance quotes, online or off, and you'll have no trouble remembering to add gap insurance to the list of things you're supposed to be looking for. Why? Because gap insurance is designed to make sure that the next time you have an accident you aren't left scrambling for ways to pay off your current car loan.
When you get right down to it, it's every lender's worst nightmare-the moment a driver totals their car and can't pay off their loan. Sometimes it's because they didn't remember to add collision coverage to their auto insurance quotes (oops) but part of the time it's something more sinister-failure to put away enough money to pay off their loan after their car gets done depreciating.
When you get right down to it, wines, antiques and land are the only assets that appreciate with age-and even that's debatable at times. The average car isn't on that list, for good reason. Most vehicles depreciate at a rate of 7-12% a year (or higher, depending on how hard it's driven). Since insurance companies go to great lengths to make sure they're not paying for a new car when you total a piece of junk, it shouldn't come as any surprise to find out that many, many people have found themselves at the wrong end of the deal and owing more on their car than their car is worth.
So what happens when you get in a wreck? Gap insurance doesn't pop up on all of the forms when you're hunting around for auto insurance quotes, so many people don't even know it exists. Those that do often forget they need it when they're shopping for coverage. The end result? You're in an accident, you total your car, and the check the insurance company cuts you is smaller than the note on your car.
How much will your car be worth?
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So now you have an outstanding loan on your car, which means even after you hand over your insurance payment you're still stuck making payments each month. How much worse can it get? Oh yeah, right. Somewhere in there you still have to buy another car…
Have you seen the interest rates many companies give you if you already have another car loan? Even if the interest rates aren't terrible you're still stuck making two car payments each month, which can be hard on anyone's budget. You either have to admit defeat and pay the extra bill each month or submit yourself to driving around in a clunker that you paid cash for while you get your other car paid off. Or there's always the bus.
Had you remembered to pick up gap insurance when you were shopping for auto insurance quotes you wouldn't have had a problem, since gap insurance is designed to “bridge the gap” (hence the name) between your car loan and your car so when it's all over you walk away scot free.
