Have you splashed the cash on a new car? Don’t forget about the necessary insurance to protect it, too.
There’s no feeling quite like driving your new car off the dealership’s lot, and cruising the roads for the first time. Everything is sparkling, new, and also completely costly to replace. So when an accident happens in your new vehicle, you may be facing quite a loss. A serious crash that wrecks your new car beyond the point of repair can leave your wallet empty, even if you have full-coverage car insurance.
While auto insurance will payout the car’s market value, minus the deductible, in this case, it doesn’t always mean you’ll break even. The market value will be less than what you paid for the car, even if you just drove it away from the dealership’s lot. As a result, you might have nothing left to buy another vehicle once you pay off your lender. Here’s when Replacement Coverage steps in. This coverage is designed to reimburse you for the full cost of a brand-new model, should your vehicle be totaled in an accident.
Your car starts losing value immediately after you buy it. The depreciation rate for used vehicles is currently about 14.5% a year. That means if you buy a $30,000 new car, the market value will probably drop to $25,650 within one year. Within two years the car might be worth less than $22,000.
New-car replacement insurance eliminates worries about depreciation. If your car is totaled, the insurance company will cut you a check, minus the deductible, to buy a new vehicle of the same make and model.
Are you considering adding new car replacement insurance to your policy? Contact insurance experts Perry & Carroll in Elmira, New York for all of your car insurance coverage needs.