Měsíční archív: Červen 2015
The simple explanation is that gap insurance closes the “gap” between what your insurance company believes the worth of your vehicle is and how much you owe the finance company.
With this knowledge it will be a simple matter to find out exactly how much gap insurance you will need.
The minute you drive a new car off the dealer’s lot it depreciates by 25%. If you purchase a vehicle for $32,000, as you leave the lot it devalues to a worth of approximately $24,000.
This means that if you were to turn around and immediately resell the new vehicle you may get around $19,000, if you’re lucky. After a year the car would be worth $20,000, and by the end of five years you would find it worth around $10,000.
Of course gap insurance isn’t needed if you’re one of those who pays cash, which is an exception. If you were to take out a finance loan of 0% down and 6% APR for 60 months then after one year you would end up paying approximately $3000 more than the car’s worth.
By the fifth year the gap would close, and you would have a car worth $22,000 less than when you purchased it. And this is if you have good credit in order to get financing at a 6% premium interest rate with 0% down.
Gap insurance fills in the “gap” between what you owe on your car and the devalued market price in case of an accident or other unforseen occurance. However, there are some cases where gap insurance will do you no good.
- For example, if you place a substantial downpayment, say 25%, on the new car and then take out a loan much less than the value, you have already taken care of most of the depreciation for the payment duration.
- Another example is making a smaller downpayment of around 10% and a shorter loan term of 24 months, then you will have reduced the gap to 0% within a year.
When looking into gap insurance it’s important to learn whether your existing insurance plan might already have a gap clause to protect you. This will save you the extra cost of gap protection.
The three main types of gap insurance that is marketed to senior citizens are:
- Prescription Medicine Plans
- Hospitalization Insurance
Each type of gap insurance has its own benefits. It is essential that you read through all of the terms and conditions before signing up for a plan.
If you have Medicare, you should consider getting Medi-Gap Insurance. This is due to the fact that Medi-Gap was specially designed to go hand-in-hand with Medicare. This kind of gap insurance will ensure that you have nothing to pay. Medicare typically covers seventy-five percent of medical costs.
With Medi-Gap Insurance, you will not have to pay any additional expenses because it will make up the difference between the two plans. When purchasing Medi-Gap insurance, make sure to do it through an authorized Medicare provider.
Gap insurance can also cover the costs of your prescription medications since basic Medicare does not. Prescription drugs can be extremely expensive if you do not have insurance that will pay for them. The best thing to do is purchase gap insurance to cover the costs of any needed medicine.
This will save a lot of money in the long run. Not only that, but it guarantees that you can get your prescription filled when needed. You will not have to wait for a paycheck to arrive if you want to go to the pharmacy.
You can also benefit from gap insurance for hospitalization. This type of insurance will pay for the medical bills if you have been hospitalized. However, most Medicare plans pay all hospitalization costs.
Therefore, it is essential that you read through the fine print on your insurance plans. If you are going to buy gap insurance for hospitalization purposes, make sure that you understand the rules and regulations. The plan needs to be beneficial to you. Otherwise, the additional coverage is not worth buying.
Before entering into a gap insurance contract, you should have a lawyer read through the plan. They can explain anything that you do not understand. Along with that, they have the ability to find loopholes that can exclude you from receiving benefits. Your lawyer is the best person to use to accurately judge how a good a plan is. It can save you from a lot of trouble down the line.
Many car buyers still do not understand the benefits of gap insurance. Lots of them still believe that having a comprehensivecar insurance on their car is important. Yet the benefits of a gap insurance policy cannot be overemphasized. Any car bought through credit or finance plan is still liable to either an accident that will completely write off the car or it may get stolen and never be found.
Should such an unfortunate incident occur, the car buyer will be expected to continue paying the car loan until it it is fully paid, despite the fact they may never see the car or use it ever again.
If the car had a comprehensive insurance policy, the insurance will pay for the value of the car at the time of the accident. It is important to remember at this point that a car once purchased, loses value very fast, immediately its driven off the dealership.
So if a car cost about $20,000, it loses about 20 per cent of its value. The difference between what the car cost and what the insurance will pay will be the responsibility of the buyer.
This is where gap insurance comes in handy. Gap insurance will cover the cost between what the comprehensive cover will refund and what is owed in total. This amount can be quite substantial, sometimes up to $15000. Paying such amounts especially for a totaled car is not very easy. This shows whygap insurance is so important.
In the event that an accident happens and the car is totaled, the car buyer with gap insurance will simply walk away without having to pay a cent. Gap insurance pays no matter who is at fault.
A reliable provider of gap insurance in the US State of California is Jim Moran And Associates. This insurance services provider has two main gap insurance products. The first is the Gap Protection Plan. In this plan, if the car is written off, any debt still owing on the car will be written of by the dealer as this insurance plan will compensate the dealer. All that the car owner will need to pay is the insurance deductible.
The GAP Plus Protection is similar to the Gap Protection Plan, only that this type of gap insurance cover also covers all other out-of-pocket expenses such as the insurance deductibles and others, up to a maximum of $1000. This ensures that the borrower walks away from an accident with no bills to pay and can begin the entire process of purchasing a car once again.
The car could be stolen, wrecked in an accident and may be even damaged beyond repair. Cars also depreciate in value very fast, unlike real estate property, such as a house, which tends to appreciate in value.
If a car is purchased on credit, maybe through a finance program, buyers are encouraged and advised to purchase gap insurance. Gap insurance is insurance that covers a car buyer who still owes money on the car.
The gap insurance is meant to protect the car buyer in the event the car is totaled, stolen or can not be used any more.
Gap Insurance Providers
Gap insurance is usually provided by most major insurance companies. It is convenient to have this insurance as it offers the car buyer peace of mind, with the knowledge that they are covered in the event the car is totaled. Some dealers and car sales companies make this insurance a mandatory part of a car purchase, for those buying on credit.
Auto buyers who do not take out this loan will be forced to pay the difference between what they already paid for the car and the value of the car at the time of purchase.
Gap Insurance Benefits
The benefits of having gap insurance are plenty. The costs of the insurance are low, and are usually incorporated with the car payment. Gap insurance is also initiated when an automobile is leased out. This is good cover to both the car owner and the individual or company leasing the car.
Gap insurance does save money. Buyers of automobiles who have gap insurance can claim the insurance if they sell the car to another party. When a car buyer seeks to sell off a car that they purchased on credit, they will take it to a dealer who will sell it off. Once sold, the dealer will alert the car owner and then provide them sale documents.
These documents will be attached to a claims application which is then sent to the insurance company. Once the insurance company processes the application, the car buyer will receive a refund of part of the money they paid as gap insurance.
Gap insurance is an insurance product that is provided by insurance companies across the nation. It is an important auto insurance to own and offers protection and cover to a new car buyer.
Lot of drivers decide to purchase their automobiles from main franchised traders each time.
This is because they have got a broad alternative of vehicles, frequently sold-out as part of the producers used car scheme, warranties, mechanical check and peace of mind are also provided for the consumer.
If you are buying a used car then you have to visit a franchised trader because some of the Internet marketers are merely agents so they are acting as middle men between you the consumer and the franchised trader.
Because of the current economical meltdown, the ever arising easy way at which one can get data over the World Wide Web, a lot of traders can no longer survive by selling cars only.
Some car trader groups have got committed finance sections specifically organized to trade finance and insurance policy, merchandises such as gap insurance, extended warranties, trey insurance with other insurance related merchandises. Main traders and car supermarket today now budget to rake in as much money as possible from finance and insurance as they do from the sale of cars. Some car traders will want to make over $1500 profit per new or used car sold, and huge percentage of that profit will come from finance and insurance products.
The increase in this kind of insurance merchandises has ensued in traders directing their sales teams to trade gap cover on every automobile they sell. All the same, insurance policy prices can vary dramatically when bought from a car trader or supermarket.
You will want to ask how much should you pay for a gap insurance policy?
A survey of main traders, car supermarkets, and some freelance traders was accomplished and observed a startling array of gap insurance prices.
The monetary value of a gap insurance policy at main franchised traders is about $4000 for a policy which will address vehicle replacing up to the value of $15000
Car franchises like BMW, Audi, Porsche and Mercedes seem to be exploiting the fame of this kind of insurance with prices as high as $1000 per vehicle replacement policy. some prestige franchised traders calculate gap insurance prices on percentage of the vehicle selling price leading to a high policy costs.