Have you ever decided to purchase a vehicle and realized that you didn’t qualify for the amount needed or perhaps was overcharged for GAP Insurance by the dealer? To make things worse, you discovered that you could have paid much less by choosing your financing for the vehicle and GAP insurance through your Credit Union, insurance company or bank? Before you purchase your vehicle of choice, get pre-approved. Getting pre-approved does a few things:
- Increases your buying power – Cash in hand is king!
- Gives you control over your choice of lender financing and interest rates
- Saves time and reduces stress when shopping for your new vehicle and eliminates the guessing game about the amount that you qualify for.
Be knowledgeable about Gap Insurance before your purchase! What is Gap insurance? According to CarInsurance.com (2015), Gap insurance, also known as loan-lease payoff coverage, can provide valuable protection during the early years of your car’s life if you have a loan or a lease.
If a loss occurs, gap car insurance will pay the difference between the actual cash value (ACV) of the vehicle and the current outstanding balance on your loan or lease. Sometimes it will also pay your regular insurance deductible. Car owners often assume that if their car is totaled, it will be replaced at the amount they paid, or at least the amount they owe. This is not so. That is why many car insurance companies offer gap insurance (loan/lease payoff insurance) as an optional coverage that is available with physical damage coverage. Typically, a stand-alone gap policy is sold by a car dealer at a higher cost.
We live in a society where consumers want what they want and they want it now. Take a deep breath, and consider the costs involved in the purchase of your vehicle. Gap insurance is just one example of several offers that a buyer could be offered at the time of purchase and feel pressured to purchase before leaving the dealership.
Avoid purchasing your vehicle in reverse. Do your homework starting with your lender (Credit Union or Bank). Inquire about interest rates, insurance products, get pre-approved, then shop for your vehicle that you want. You could have a better consumer buying experience, less hassle, having a check in hand increases your buying power and you will feel more in control of your purchase.
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