New cars – who doesn’t like them? For any man, this purchase brings about more than just a convenient means of transport; the purchase of a new vehicle brings with it prestige and the markers of prosperity.
Indeed, the brand new vehicle, freshly painted with the lingering, sweet smell of a newly-minted automobile still hanging in its interior, promises stability and reliability that a second-hand vehicle can never offer. After all, who are you to know what the previous owner of the second-hand car has done to it? (The reasons for the sales are even more of a mystery.)
New cars are nice and all, but insuring new cars can often times be quite a hassle. Protecting your new car from the unforeseen is a chore in itself. Continue reading below to learn more about how to get insurance for your new car and why it’s important to do so.
All About Getting Insurance For A Brand New Car
While the reliability and stability that comes with new vehicles is nice, the owners of these automobiles must still remember that no amount of paint or money can stop unforeseen accidents from happening. Many new car owners, overwhelmed with the excitement of the purchase, immediately bring their gleaming new car out for a joy ride, only to meet with an accident.
Do not be like them – do the smart thing, and protect you and your car from these unfortunate accidents with an insurance policy before you even take your car out of the dealership.
Why Insurance For A New Car Is Important
Think about this – the brand new car you just purchased would probably be the single largest purchase that you’ve made, right after your own property. This would definitely have made a huge dent into your finances after the purchase – all the more reasons not to put your already dwindling wealth on the line by driving your new car out without proper insurance coverage.
Accidents will cripple your finances. A small bump will cost you hundreds of dollars, while more serious accidents (think pile-ups) will take thousands of dollars off your pockets if your vehicle is uninsured. Even if you’re not at fault, you’ll need your own legal representative to argue your case in court and your own time to formulate your defense with your attorney. The costs to you will just keep piling up because of your negligence in the purchase of an insurance policy.
What You Should Look Out For
First, you should find out the minimal required sum to be insured for in your state. Every state has a different policy regarding this, but they generally make it mandatory for motorists to purchase bodily injury coverage, property damage coverage and personal injury protection.
After settling the compulsory components of your auto insurance policy, you should then move on to the other aspects of an auto insurance policy. Ask yourself:
- What is the Actual Market Value of your vehicle? (A higher value means that you’ll need more protection for your vehicle)
- Do you have enough money to buy another vehicle if your vehicle is totaled? (If you don’t, and the vehicle is vital to your daily routines and regimes, you should purchase more coverage to protect your finances – consider GAP insurance, which will be covered below)
- Will you have enough to pay for the repairs yourself? (If you do, you probably can pay less premium for less coverage)
- Do you already have life insurance? (This may mean that you can purchase just the minimum coverage for Personal Injury Protection required by your state)
- How much premium and deductibles are you willing to fork out for your insurance policy?
These questions will help you formulate the best auto insurance policy based on your needs.
Insuring a new car- GAP Insurance
When you drive your new car off the lot the value of your vehicle plummets, sometimes as much as 20%-30%. For instance, let’s say that you paid $25,000 for your new vehicle and met with an accident a month later. If you are on an installment plan, you would have only made 1 payment – your loan amount is still close to the $25,000 purchase price.
This means that your insurance company will only help you pay for 70% of the vehicle’s value – you will need to pay the remaining 30% by yourself, which will go up to $5,000 in this case!
This is where GAP insurance comes in. GAP stands for Guaranteed Auto Protection, and it helps to cover the depreciated value for your vehicle. This is very important for all new car owners – you never know if you’ll meet with an accident just a few months with your new ride, and GAP insurance will help you absorb the impact to your finances.
However, GAP insurance might not be available from your insurance company. Fret not, because your dealership will probably offer GAP insurance as well. If GAP insurance is not available from the dealership, there are independent insurance companies that offer standalone GAP insurance packages – but you’ll suffer in terms of premiums and deductibles, of course.