Consumers Urged to Shop Smart and Protect Their Investment
TALLAHASSEE, Fla. — Besides hearts and flowers, February is the month for car deals – and dealerships everywhere are attracting consumers with lower sticker prices, cash-back offers, and special financing. But to avoid ending up with a broken heart, car-buying consumers need to take smart steps to protect their investment.
Whether it's a new or used vehicle, the buyer is ultimately responsible once that new set of wheels is driven off the lot. Tim Meenan, executive director for the Service Contract Industry Council (SCIC), Motor Vehicle Protection Products Association (MVPPA), and Guaranteed Asset Protection Alliance (GAPA), shares three ways car buyers can keep their vehicles and their pocketbooks protected.
- Beware the GAP.
Many consumers are unaware that they could be left holding the bag if their vehicle is totaled or seriously damaged while they still owe a lot on it. That’s because cars depreciate quickly, so a collision soon after purchase could mean you owe more than the car is now worth. No one wants to be left to pay off a loan for a car they can no longer drive. Consider purchasing a GAP waiver when you buy a car to avoid that nightmare scenario. If a disaster does hit and the vehicle is totaled or stolen, a GAP waiver will cover some or all of the difference between the car’s actual value and the balance remaining on the car loan.
- Prepare for the worst; hope for the best.
Modern vehicles are more than marvels of engineering – they’ve become complex computer systems. According to the auto repair website CarMD, the most common vehicle repair for American consumers when the check engine light comes on is replacing an oxygen sensor, which on average can cost about $250. But the No. 2 repair – replacing a catalytic converter – can cost five times as much. Studies have shown that nearly 40% of Americans don’t have enough money saved to cover even a $400 emergency. A service contract can help cover the cost of vehicle repairs and necessary replacements and can be purchased anytime. Many states require that contracts have a free-look period, giving consumers time to read the fine print and decide if the service contract is right for them.
- Cover those expensive accessories.
Besides the kinds of repairs typically covered by a warranty or service contract, there are plenty of other expensive replacements and repairs that can take an unexpected bite out of your budget. For instance, key fob replacement can cost upwards of $500 on some vehicles. That’s where motor vehicle protection products come in. They offer an array of protection, from tire and wheel road hazard coverage to the windshield and key fob replacement. Do you live in dread of that first scratch or dent? There are protection products available to cover that, too.
“The fact is, there’s no way to calculate just how much a car will end up costing,” Meenan said. “GAP waivers, service contracts, and motor vehicle product protection plans can help combat those unexpected budget-busters,” Meenan said.