Buying a new vehicle can be very exciting. I remember purchasing my first brand new vehicle. Ahh, that new car smell.
\nToday the average new car costs about $36,000. According to a recent Edmunds.com report, the average car loan is 69.2 months. That\u2019s almost six years. Data also suggests that 84-month loans have increased significantly over the last several years.
\nUnfortunately, bigger and longer-term loans don\u2019t have an impact on vehicle depreciation. Carfax.com showed the current depreciation value of new vehicles might drop by more than 20% in the first 12 months of ownership. Trusted Choice indicates some vehicles could depreciate as much as 30% the first year; 11% of that occurs the moment you drive off the lot.
\nDepreciation can be a major factor if a vehicle is totaled after an accident. And it could leave you stuck with a loan for a vehicle you can no longer drive. This is because most auto policies have \u201cActual Cash Value\u201d (ACV) coverage. For instance, let\u2019s say that a $36,000 car depreciates 11% the moment you drive off the lot. Now it\u2019s worth only $32,040. If your car is totaled in a loss, insurance will only cover the actual cash value, or $32,040. But if your loan is still $36,000, you\u2019ll have to pay the difference of $3,960 out of your own pocket.
\nNaturally, people aren\u2019t happy in situations like these; many don\u2019t realize how quickly vehicles depreciate. Fortunately, there\u2019s a way to remedy this situation.
\nWest Bend\u2019s Home and Highway\u00ae policy offers \u201cAuto Loan Lease\u201d coverage to fill that gap, as do many dealerships. This is a great product to purchase, especially if you don\u2019t have a big down payment on the new purchase. In addition, companies offer a time threshold in which to purchase this coverage. So, the next time you buy a vehicle and need a loan to do it, think about purchasing Auto Loan Lease or gap coverage. It could be one of the best insurance investments you make.<\/p>\n","protected":false},"excerpt":{"rendered":"
Buying a new vehicle can be very exciting. I remember purchasing my first brand new vehicle. Ahh, that new car smell. Today the average new car costs about $36,000. According to a recent Edmunds.com report, the average car loan is 69.2 months. That\u2019s almost six years. Data also suggests that 84-month loans have increased significantly […]<\/p>\n","protected":false},"author":3,"featured_media":3003,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[12],"tags":[],"class_list":["post-1376","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/flagshipinsuranceservices.com\/index.php\/wp-json\/wp\/v2\/posts\/1376","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flagshipinsuranceservices.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flagshipinsuranceservices.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flagshipinsuranceservices.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/flagshipinsuranceservices.com\/index.php\/wp-json\/wp\/v2\/comments?post=1376"}],"version-history":[{"count":0,"href":"https:\/\/flagshipinsuranceservices.com\/index.php\/wp-json\/wp\/v2\/posts\/1376\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flagshipinsuranceservices.com\/index.php\/wp-json\/wp\/v2\/media\/3003"}],"wp:attachment":[{"href":"https:\/\/flagshipinsuranceservices.com\/index.php\/wp-json\/wp\/v2\/media?parent=1376"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flagshipinsuranceservices.com\/index.php\/wp-json\/wp\/v2\/categories?post=1376"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flagshipinsuranceservices.com\/index.php\/wp-json\/wp\/v2\/tags?post=1376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}