Today is the day you are going to make your dream of buying a brand-new SUV, complete with sunroof, touchscreen, leather interior, and, what the heck, an upgraded tire and wheel package, a reality.
You’ve negotiated the perfect deal, and you’re hashing out the final details when the finance manager stealthily slides an informational pamphlet across the table entitled “Gap Insurance.” Hmmm, what’s this?
You start skimming the information… “smart investment,” “also called auto loan/lease coverage,” but wait, hold on, here’s something that catches your eye:
Should you ever be involved in a car crash that totals your vehicle, or your vehicle is stolen and never recovered, Loan/Lease Gap Insurance will cover the difference, or “gap,” between what you still owe on your auto loan and the actual cash value of the vehicle at the time of the event.
While you were initially ready to emphatically say “No” to this extra cost, now that you’ve read a bit more about gap coverage, your interest is peaked. Your initial doubt has now evolved into something much worse – worry and concern for two major reasons. The idea of totaling your dream car and then not being able to replace it is making your stomach turn, palms sweat, and more notably, your head hurt. However, so does the idea of increasing your loan and shelling out even more money to the auto lender.
So, now what? It’s time to get help from Morse Insurance, of course. As your local and independent insurance professional, we are here to provide you with expert advice about all your auto insurance coverage options, including gap coverage, and to inform you that you have options for purchasing this essential insurance option.
Purchasing Loan/Lease Gap Coverage For Your New Car
A Loan/Lease Gap Endorsement is a particularly smart investment for car buyers to consider. In the event you ever experience a total loss of your vehicle in an accident or if your vehicle is stolen and never recovered, this insurance should cover the difference between the actual cash value of your car and the balance of your loan or lease at the time of the incident. If you don’t have this coverage and total your car, then guess who will most likely get stuck paying your lender back for the difference between what your insurer values your car at and what you still owe on your loan or lease? That’s right – you.
So, of course, Morse recommends this essential auto coverage to many of our auto insurance clients. In addition, we also want to let you know that this endorsement can be purchased one of two ways –either through your local, independent insurance agent or when you are at the dealership.
While the gap coverage details should be very similar regardless of who you decide to buy from, your decision to buy it from the auto dealer or lender could affect what you pay for the coverage, your cancellation options, and, potentially, even the claims process.
To help you better understand both purchasing options and aid in your decision-making process, we created a chart that compares what most car dealerships or lenders can offer you versus what a local, knowledgeable insurance agent, like Morse, can provide you.
| What The Dealer Offers: | What Morse Provides: | |
|---|---|---|
| Cost | Depending on the make and model of your new car, the dealership could quote you as much as $1,000 for this additional coverage. The extra cost will likely be rolled into your new loan or lease (increasing your monthly expense and requiring you to pay interest on the policy) or need to be paid upfront as a lump sum. | An independent insurance agent can shop around to ensure that they find you the perfect car insurance policy at the most competitive price. When you decide to add this essential coverage to your current auto insurance policy vs. purchasing a separate policy from the car dealership, you can do so interest-free and typically for as little as $40 a year. |
| Cancellation Policy | Most policies purchased through the dealership or lender include “no cancellation” clauses, which means you will not be able to cancel until the auto loan or lease is paid in full. This means, depending on your particular agreement, you could be contractually obligated to pay for an insurance coverage you no longer need for as much as seven years, so be sure to review the fine print. | A gap insurance endorsement can be canceled at any time, for free. That’s right - adding this additional coverage to your current auto policy through your Morse agent means you can cancel coverage at any time. So, should you find that gap insurance is no longer necessary for your particular situation like in the event you pay off your loan in full, you can cancel without any penalties or fees. |
| Claims Assistance | If you decide to purchase gap insurance through the dealership, in the event of a claim, there is a good chance that you will be working with a third-party company or claim adjuster out of state or worse, out of the country, who will only know you as a policy number. | Adding gap insurance to your current auto insurance policy means that in the event of a claim or total loss, you will be supported by an experienced team of insurance professionals who know you, the state insurance laws, and more importantly, how to expedite your claim. |
| What The Dealer Offers: | What Morse Provides: | |
|---|---|---|
| Cost | Depending on the make and model of your new car, the dealership could quote you as much as $1,000 for this additional coverage. The extra cost will likely be rolled into your new loan or lease (increasing your monthly expense and requiring you to pay interest on the policy) or need to be paid upfront as a lump sum. | An independent insurance agent can shop around to ensure that they find you the perfect car insurance policy at the most competitive price. When you decide to add this essential coverage to your current auto insurance policy vs. purchasing a separate policy from the car dealership, you can do so interest-free and typically for as little as $40 a year. |
| Cancellation Policy | Most policies purchased through the dealership or lender include “no cancellation” clauses, which means you will not be able to cancel until the auto loan or lease is paid in full. This means, depending on your particular agreement, you could be contractually obligated to pay for an insurance coverage you no longer need for as much as seven years, so be sure to review the fine print. | A gap insurance endorsement can be canceled at any time, for free. That’s right - adding this additional coverage to your current auto policy through your Morse agent means you can cancel coverage at any time. So, should you find that gap insurance is no longer necessary for your particular situation like in the event you pay off your loan in full, you can cancel without any penalties or fees. |
| Claims Assistance | If you decide to purchase gap insurance through the dealership, in the event of a claim, there is a good chance that you will be working with a third-party company or claim adjuster out of state or worse, out of the country, who will only know you as a policy number. | Adding gap insurance to your current auto insurance policy means that in the event of a claim or total loss, you will be supported by an experienced team of insurance professionals who know you, the state insurance laws, and more importantly, how to expedite your claim. |
With Morse by your side, finding comprehensive coverage for your new car or truck doesn’t have to be complicated. Our team of experienced insurance professionals will assist you every step of the way, from providing you with a customized auto insurance quote for your dream car to making sure you’re taking advantage of all available discounts, to informing you about essential coverage options, like Gap Insurance, Accident Forgiveness, and Disappearing Deductible. At Morse Insurance, we know that keeping you informed about your auto insurance options is just one more way that we can keep you and your family safe.
If you have any additional questions about gap insurance or are interested in adding it to your existing auto policy, Morse, of course, is happy to help. Stop by any one of our four convenient Massachusetts locations, or give us a call to connect with one of our friendly insurance professionals today.