You’re about to purchase your next car. You’ve found the deal that you like, the part-exchange value is appealing, and you are eager to purchase your next car. Do you sound familiar?
Every year, thousands of motorists prefer to purchase their cars at main franchised dealers. They offer a wide selection of vehicles and often as part of the manufacturer’s used car program. Additionally, they provide warranties, a mechanic check and some peace of mind.
You will most likely need to visit a franchised dealership if you plan on buying a car. Most of the Internet-based sellers are simply brokers who act as intermediaries between the customer and the franchised dealer.
The dealer may not only be interested in selling you a car, but also other things.
Many dealers are unable to survive selling cars in the current economic climate.
Many car dealers have finance departments that are specifically set up to sell insurance products and finance products, such as extended warranties, gap insurance, and tyre coverage, among others. Car supermarkets and main dealers now plan to make as much from insurance and finance as from car sales. Car dealers aim to make around PS800 profit for every car sold, new or used. Nearly half of that profit comes from finance and insurance products.
These types of insurance products are becoming more popular, so dealers have started to target their sales team to sell gap coverage on every car that they sell. The policy cost can be very different depending on whether it is purchased through a dealer or a supermarket.
How much should you spend on a gap insurance policy?
We recently conducted a survey of major dealers, car supermarkets and independent dealers. We found an astonishing array of gap insurance prices.
A gap insurance policy from main franchised dealers costs around PS399 and covers vehicle replacements up to PS15,000.
Mercedes, BMW, Porsche, Mercedes, and Audi are all leveraging the popularity of this type insurance with vehicle replacement policies at prices up to PS1000. Gap insurance prices are calculated by prestige franchised dealers based on a percentage. This results in high policy costs.
Many dealers now have Business Managers who are specifically trained to sell insurance and finance. Don’t be surprised if you are offered heavy sales! You will be asked by the dealer to purchase a gap insurance. The salesperson will also want you to do so.
Internet shopping!
You can save a lot by purchasing gap insurance online from the increasing number of gap insurance providers. Online buying of gap insurance policies can save you up to 75% on rent and high commissions for sales staff.
It is easy to set up a gap policy online. All you have to do is complete a quick online application form. If you have any questions, you can always reach someone by phone.
You can save money by choosing an online policy. Most of the providers offer clear product descriptions, key benefits, and the T&C’s.