Purchasing New Car Replacement Insurance Could Save You Thousands of Dollars
Imagine getting a brand-new car, only to total it in an accident just a few months later. Because most cars depreciate in value significantly during their first year, the settlement that you receive from your auto insurance company may be quite a bit less than what you paid for the vehicle. In fact, if you financed it, then the settlement may not even be enough to pay off the loan. This can put some drivers in a financially vulnerable position if they are not able to pay for a new car out of pocket.
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How New Car Replacement Insurance Works
New car replacement insurance is designed to ease the burden of replacing a brand-new car that has totaled in a collision. Rather than paying a settlement that is equal to the depreciated value of your car, your auto insurance company pays you for what a brand-new car of the same make and model is worth, not including your deductible.
In most cases, this type of auto insurance coverage is only available for cars two years old and newer, and it does not cover leased vehicles. Additionally, it usually applies for a limited period of time, such as one to two years, and miles, oftentimes 24,000 miles or less. Most auto insurance companies only offer this coverage to drivers who have collision and comprehensive coverage.
How Much New Car Replacement Costs
Not every auto insurance company offers new car replacement, and even those that do may not have it available in every state. While this add-on is generally pretty economically priced, oftentimes under $20 a month for a sedan, the exact amount that you’ll pay for coverage is hard to predict. If you’ve recently purchased a new vehicle and are considering adding this coverage to your policy, then a Nevada Insurance Enrollment auto insurance agent can help you find the best price.
Is New Car Replacement Insurance Worth It?
As is the case with any auto insurance product, there’s no formula that can show whether new car replacement is worth the cost; it all comes down to how much of a risk you’re willing to take. When considering whether this auto insurance product is right for you, consider:
♦ How much the coverage will cost
♦ How quickly your vehicle will depreciate in value as a new auto
♦ Whether you could replace your vehicle without financial hardship
♦ Can you afford to be upside down by thousands of dollars if you do get into an accident
Find Out More with Nevada Insurance Enrollment
Your new car depreciates in value the minute you drive it off the dealership lot, and if it totals in an accident, then you may not get back from the auto insurance company what you paid for the vehicle. Ultimately, new car replacement insurance provides peace of mind, letting you drive your new car with confidence that if the unexpected happens, you’re covered. To find out more about this add-on and to talk about whether it’s right for your needs, talk to a Nevada Insurance Enrollment auto insurance agent.
Read More: Auto Insurance in Las Vegas, Nevada
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DISCLAIMER: It is important to note that the information contained herein is made general for the purpose of explanation. You should consult your policy for exclusions or other language that may alter your policy.