![]() This determines the cost and value of the car, safety features, and repair costs. ![]() Your car: The make, model, and year of your car can affect your insurance premium. Here are 7 of the key factors that insurance companies take into consideration when calculating your car insurance premium: ![]() As a rule of thumb, small down payments create a larger depreciation difference than large down payments do.There are a number of factors that determine how much your car insurance will cost. If you were covered by gap insurance here though, you would be fully covered up to what the finance company wants though. In fact, if you tried to buy that same vehicle from the same dealership with the insurance payout money you receive, chances are you’d find a significant gap between what you paid the first time versus what you can put down for the replacement. In this situation, if you didn’t get gap insurance – either from an insurance company or the dealer – then you could be out a lot of money. The insurer would pay out only as much as the vehicle’s current value, leaving the policyholder to pay the “depreciation difference” between what the finance company says it’s owed for the destroyed vehicle, plus any applicable taxes or fees. Now, let’s say that same vehicle were to be stolen or involved in a total loss accident a few miles down the road. ![]() ![]() Gap insurance is not required but it’s no secret that as soon as a new car gets driven off the dealer’s lot its value can instantly depreciate by 20 percent or more. Why? In a nutshell, gap insurance protects your automotive investment against depreciation. Let’s start with “gap insurance” because it’s additional coverage that’s pretty much essential if you plan on buying or leasing a new vehicle. We covered the basics, now it is time to dig deeper. ![]()
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