How to Save $$$ on Gap auto Insurance

The average price for gap auto insurance sold by an auto dealership or
finance company is $578.
Q. So why would anybody in their right mind pay $500 more they should?
A. They don't know any better.
Imagine you're in a car dealership and you've just purchased a brand
new car. You're sitting there with a self satisfied smile on your face
that lets everybody in the showroom know you just brought the salesman
to his knees with your finely honed negotiating skills.
Next you go see the finance person to arrange a loan. This is where
you're casuallyinformed that if you wreck your beautiful new car
duringthe next year or two you're going to have fork over maybe five
grand because the car will be worth that much less than what you still
owe the bank.
Lucky for you the finance guyhas a tailored made solution to the
problem. For a measly$578 one time fee you can purchase a gap policy
that protects you from a potential shortfall, up to $5,000, if youowe
the bank more than the car is worth when that bus hits you.
Of course you're going to say "sure, go ahead" because you're afraid
of losing your shirt and, by the way, did I tell you the premium could
be rolled right into the loan?
On one hand, you're relievedto know the value your assetis protected,
but on the otherhand you're asking yourself why it had to cost so
much.
Well, it doesn't. But who knew that there was even such a thing as gap
insurance much less how much it's supposed to cost. The problem is not
with you, but with the major insurance companies and their brokers.
The reason you don't hear anything about gap from yourinsurance agent
is that it isn't exactly a big money maker. With an average gap
endorsement costing around$35 a year, there isn't a lot of profit
incentive to buy 30 second spots on American Idol.
Besides the price, there's another difference between the gap
insurance sold by a car dealer and the policy rider sold by a name
brand gap insurance provider. When you buy gap from a major insurer
you can cancel the rider as soon as the loanbalance and value of your
car reach parity – usually within the first two years of ownership.
With dealership gap insurance, the coverage is spread out over 60
months and cannot be canceled for a refund – whether you need it or
not.