Buying a new vehicle?
Here are some things to consider.
Purchasing a new vehicle can be an exciting journey. But choosing what make, model, and color best suits your needs can be also overwhelming. On top of that, there are decisions to be made regarding auto insurance.
Here are some tips to consider when shopping for auto insurance.
Consider adding GAP coverage to your policy. GAP coverage provides a cushion between the amount financed for the vehicle and the actual value of the vehicle.
- You purchase a 2018 Ford F150 and finance it for $30,000.
- The vehicle depreciates in value by 15 percent as soon as you drive it off the dealership’s lot.
- You now owe $30,000 on a vehicle that is worth $25,500.
- If your new vehicle is totaled by a covered loss, GAP coverage would cover the $4500.
Another thing to look at is the type of safety features your new vehicle has. There are several safety features that, if included in your vehicle, could result in a discount on your policy. These can include features like airbags, anti-lock brakes, and anti-theft devices. Most of the time, your VIN (vehicle identification number) will automatically tell us you have these features. But it doesn’t hurt to mention them if you have them.
Next, you need to consider what types of coverage you want. If you paid cash for your new vehicle, technically, you do not need full coverage on it. But it’s still a good idea to have it. When you only have the minimum liability coverage, you could be setting yourself up for long-term financial hardship. While minimum liability coverage is cheaper up front, the expenses incurred if you have a covered loss, could cost you far more than the loss of your vehicle.
You’ll also want to think about what deductibles you want on your policy. Your deductible is the amount of money you pay out of pocket before the coverage on your policy will kick in. Keep in mind that the higher your deductible is, the lower your insurance premium will be. If you chose to have a $1000 deductible, your premium would be lower than if you choose a $500 deductible. So, you must decide if you want to pay more each month to save you from having a potentially higher lump sum payment. Or if you want to pay less each month and deal with the higher deductible if the need arises.
As always, the team at Kannel Insurance is here to help you navigate these choices.