Car Insurance

Buying a car is not necessarily a cakewalk. Besides having to choose a vehicle and arrange for financing, you need to find a car dealer and get insurance on the car. With every step and decision you make, there are several legal formalities. The car dealer is one of the most confusing people you will meet along the way, so car buyers everywhere must keep their wits about them. Go somewhere that has a good reputation. The secret behind every car dealer is that they are interested in personal gain the commission they will make off of the vehicle they sell you, plus any add-ons.

In some states you can purchase your car insurance from the car dealer himself. Bad idea. The reason for this is they will markup your insurance rate because again, they are in it for profit. They are not interested in protecting you — this is not a priority. It IS a priority, because they will want you back again, but your specific financial needs are not at the top of their list. You will notice they will give you great service while you are there. Again, this is because they are in the wining and dining stage that appears before every closed deal. Obviously, you are more likely to purchase something from someone that treats you well. In the eyes of the car dealership, they are competing with all of the other dealers that hope to win you over while you are making a major financial decision. They are hoping you are going to be so blinded by their niceties that that will overpower your decision to purchase, lease, or walk away.

While you are being treated like royalty, stop for a minute if you hear the words gap insurance. Gap insurance is an insurance coverage that will cover you in the event of a total loss. It will cover the “gap” created by the difference between the value of your vehicle and what you currently owe on it. You may think you won’t need it, but you will. The moment you take your new car on its first drive it depreciates in value, so even if you got in a wreck or had it stolen minutes after driving away, you are going to owe more money than you intended. Gap insurance covers this. It is a good idea to get it, a bad idea to get it from the car dealership. Again, the same principle applies. They have already marked it up to make their wallets fatter. In most cases, the markup can be anywhere from $500 — $1000 above the cost of the actual coverage. This is a known fact published in Automotive News. There are several trustworthy dealers for Gap Insurance either online or through a local car insurance company. While buying insurance for your newly purchased or leased vehicle, do it through an actual insurance company. There is nothing wrong with the insurance offered through your car dealer, it will secure you from several contingencies, but it will also be more expensive.