Filling in the GAP

Car accident

It isn’t pleasant to think about, but auto accidents are a fact of life. Forbes Magazine reports that the average American will file a claim for a collision about once every eighteen years after getting their driver’s license. That means that if you got your license at 17, odds are good that you’ll be in one accident by the time you’re 35 and another by 48. Driving a Chevy with our suite of driver confidence sensors and safety features reduces the risk of being injured in a collision, but what happens after you make it through the accident? Will your insurance pay out enough to buy a new car?

Statistics tell us that as many as 14% of all collisions result in total vehicle loss. That works out to about a one in seven chance of one or more vehicles being totaled. A total vehicle loss technically means that it will cost more to repair a car than that car is currently worth, but things aren’t always that simple. Different insurance agencies use different guidelines as to when to declare a car a total loss. One might decide that any significant frame damage will total a car while another might stick closely to Kelley Blue Book price estimates.

Even after your car or truck has been declared a total loss, the situation is still murky. Insurers are meant to use three methods of determining the total value of a vehicle: the Kelley Blue Book and similar value guides, online vendor quotes, and a market search of similar vehicles in the local area. They choose the value books and the vendors they use. If they can’t find a match for your car’s make, model, and year in your area, they can expand their search to surrounding areas where the market may be weaker. Add those factors up and you may not get the full actual value of your crashed vehicle.

It gets worse. If you happen to be driving a newer model, you probably owe more than the actual value of your Chevy because of financing costs. Consider this scenario: someone runs a stop sign and rams your two year old Equinox. You and your passenger aren’t hurt, but the insurance adjuster tells you your Equinox is totaled.

The insurance company decides to offer you $16,500 minus your deductible of $1000. Sound good? Think again. Like most of us, you financed your vehicle at the dealer. You have $22,000 left on your loan. That $15,500 insurance settlement leaves you owing $6500 on a vehicle you don’t even have anymore, and you still need a new car.

This is what we call the gap- the difference between what you owe and what the insurance will pay- and it can devastate a family’s finances. A sudden debt of that size will take a chunk out of your savings or even wipe them out. If you can’t pay it, chances aren’t great that you can get a loan for another vehicle.

Michigan Heidebreicht wants to keep our Chevy family on the road. That’s why we recommend GAP Care Advantage to all our customers. This program can be applied to any vehicle we finance, new or used. If your vehicle is totaled, GAP Care Advantage will waive the difference between what your insurance pays you and what you owe with no argument. This coverage works for any adjudicated total loss, whether it’s theft or collision. It even covers your deductible for a complete blank slate.

Protect yourself and your assets by investing in GAP Care. Your credit rating will thank you.

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