Category: car insurance

If you’ve recently bought a new car, you know about lease gap insurance. Also known as loan gap insurance, this coverage is for your new car. Generally, the holder of the loan on your car whether it is the dealership, the bank, or even your Uncle George will want you to have this coverage. But what is it for and why do you need to have it? Where can you get the best car insurance rate that includes lease gap insurance?

What It Is

Lease gap insurance or loan gap insurance is coverage to protect the holder of the loan. The best car insurance rate companies usually offer it. Let’s take a look at why you would need to have lease gap insurance.

Peter bought a new car. It was spectacular for him, anyway. Though it didn’t cost as much as the hot rod he wanted, it was perfectly acceptable for him to drive around in. He paid $5,000 out of his pocket hard earned cash and the bank gave him a loan for another $15,000. Yes, the car cost him $20,000. He loved his new car and got the best car insurance rate he could. It would cost him $300 a month to insure his new baby, but he knew it would be worth it. Peter drove around town fine, until one day, somebody cut him off in traffic and his new baby took the brunt of it. She was damaged.

His insurance decided after careful consideration that his baby was totaled. Because the car was totaled, the best rate the car insurance company could give him was the value of it totaled. But now, its value was only $10,000. Yep, it dropped in value significantly when he initially drove it off the lot. Now he owed more than it was worth to the car insurance company, anyhow. But now, Peter has the $10,000 check and no car to drive. He can write that money over to the bank, but will they be happy? Not quite. He still owes them $5,000. For a car he doesn’t have anymore, and can’t drive anymore. Peter isn’t happy. This could have turned out differently if Peter had lease gap coverage. The lease gap coverage would have paid that $5,000 that Peter still owed the bank and Peter would be finished with that car, forever.

Where To Get It?

Generally speaking, the dealership where you bought the car will offer you lease gap insurance. Of course, it will just be at an average car insurance rate or higher. They want to be sure they’ll get their money if anything happens to your car before you’ve paid it off in full. You can get your lease gap insurance there, or, for the best car insurance rate, check with other car insurance companies when you get the rest of your coverage. It will be a much better price than through the dealership.

You’re getting a new car! Maybe it isn’t brand spanking new, but that’s okay. It’s your new baby and you love it. Now you need to get insurance on it. You plan to shop around, getting several quotes good going! Comparing car insurance rates is the best way to know you’re getting the right price for your new baby.

While Shopping For Quotes

Be accurate and honest. Don’t try to fudge answers chances are, the company will find out anyhow, and then it will cost you more. Just assume they’ll pull your driving record (they will) and your credit report (they can) and let them know about any tickets or accidents. Be sure to declare all potential drivers in the household even if you don’t want them insured on the policy, the company needs to know they exist. (For example, your teenage son who doesn’t quite have his license but knows where the keys to the Camry are kept.) If your information isn’t accurate and you have an accident, there is a chance they won’t have to pay after all, depending on the circumstances.

Keep the information you give the car insurance companies consistent. Comparing rates is impossible if they’re based on different information! Decide what level of coverage you want for everything, and then ask each company the same. If you ask for a certain level of coverage with one company, ask the same from all of them. If you put rental car coverage on with one company, do the same with the others. To compare car insurance rates, they need to be for the same product.

Once You’ve Got Quotes To Compare

Be sure you’re comparing apples with apples. Regardless of what you think you asked for, double check to see if that’s what coverage your car insurance rate is for. Compare the numbers. If you said you wanted 100/300/100, but sure they are all that amount. Not only is it only fair to be comparing the same car insurance rate product, but also you need to know that you got the level of coverage you said you wanted.

Consider the individual companies. Some companies are known for their excellent customer service. Is the one you’re considering? You can check the reputations of car insurance companies online there are sites where customers can give their feedback on their treatment by the car insurance companies.

Think about the easy of contacting each company. If your favorite company doesn’t have an online presence, and all bill must be mailed in, will you be okay with that? Many people enjoy the ease of having their payment come from their checking account directly each month they almost don’t have to think about it at all, as long as there’s enough money kept in the account. Or maybe you enjoy the personal touch of an agent you can call with any questions. If so, you probably wouldn’t like the cold distancing of an online car insurance company. Comparing rates is not the only thing to consider as you shop for car insurance.