Lease / Loan Coverage
You just bought or leased a new car. Everything is perfect â€“ the color, the options, even the new car smell! You also played it smart and made sure your new car was fully insured before you drove it off the lot. Youâ€™re satisfied knowing youâ€™re completely covered.
Auto leases and loans often run 60 months or longer. Add to that the rapid depreciation of a vehicleâ€™s value â€“ 11 percent the minute it leaves the lot â€“ and people can quickly find themselves owing more on leases or loans than the vehicle is worth.
Hereâ€™s how it works
Letâ€™s say you buy a new car for $20,000 with zero down and a monthly payment of $350. Six months after buying the car, youâ€™re in an accident and the car is totaled. You've made six payments for a total of $2,100 leaving a balance of $17,900.
Based on market values, your six-month-old car is now worth $16,500. Thatâ€™s what your insurance company will pay (less a collision deductible if applicable). The difference â€“ $1,400 â€“ comes out of your pocket.
Avoid out-of-pocket expenses
American Familyâ€™s Lease/Loan coverage can help you avoid these out-of-pocket expenses. Lease/Loan coverage pays the difference between the actual cash value of the vehicle and what is owed on a lease or loan if your new car is totaled. Lease/Loan coverage is available for private passenger vehicles including pickups and sport utility vehicles that carry comprehensive and collision coverage at any time after purchase or lease.
Lease/Loan insurance can complete the coverage you have on your new vehicle and protect you financially. If youâ€™ve recently leased or purchased a new car, call your American Family Insurance agent to see if Lease/Loan coverage is right for you.
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