According to experts, the moment you take a new car out of a dealer’s garage, depreciation sets in and the value of your car shrinks drastically. If you decide to sell the car a couple of days after taking it out of the dealer’s garage, you will not be able to get the same amount of money that you paid for it. Fortunately, gap insurance coverage can protect you from losing money due to this drastic reduction on the price of your car. This type of insurance coverage pays the difference between purchase price and estimated price of your car. For instance, if your car carries a price tag of $30,000 at the dealer’s place, but your insurers only covers its estimated price of $28,000, in case something happens to your car; your gap insurance will pay for the difference between original price and estimated price.
How much money should you spend on gap insurance? The amount that you need to pay depends since this type of coverage depends on the model of a car and its value. If you buy one of those big expensive cars, you will need to pay higher premiums. On the other hand, if you favor those small, but fuel efficient hybrid cars, it may be possible to get cheaper insurance coverage.
Is there a way to save money on gap insurance coverage? Yes, there are always ways to reduce insurance cost and save money. You can save money by shopping and comparing prices before buying your policy. Contact at least five car insurance providers and ask for the cheapest insurance quotes. No, there is no need to deal with insurance underwriters to get the information that you need. You can always ask for insurance quotes through emails. The good thing about asking for insurance quotes using the internet is that you get fast and efficient service without having to spend time and energy fighting off some persistent insurance agents who want to sell you just about anything that their companies have to offer.
Aside from shopping around and comparing insurance quotes, you can easily get big discounts by paying premiums annually. Annual premium payments help the insurers save on overhead cost. As reward to their clients for making their lives easier and more profitable, most insurers are willing to give back some of their savings in the form of discounts to their clients. As it is, there are literally hundreds of insurers out there who are willing to give you around 10-15% discount if you pay premiums annually.