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Obvi Ryan

What GAP Insurance Covers

what does gap insurance coverHeard of it, but not sure what GAP Insurance covers? You’ve come to the right place. We will explain 1) what GAP Insurance is and 2) why you might want to consider purchasing GAP Insurance

GAP Insurance definition: Guaranteed Auto (or Asset) Protection is a type of car insurance which protects your finances when a loan is taken out to pay for your car.

Let me paint a picture…..
An unexpected event occurs (accident, fire, flood, theft of your vehicle) and your vehicle is ruined. Your insurance company determines that the car is worth $13,000. This is less a lot less than you thought it would be. Why is that? You bought a new car, and it quickly depreciated in value over time.

You still owe $17,500 because you took out a risky long-term loan over 7 years, meaning
$17,500          – $13,000 = $4,500

What you owe – car worth = Amount you still owe
GAP Insurance protects you and will cover this $4,500 – this is the “GAP”.

What GAP Insurance covers

GAP Insurance is there to protect you from paying the loan off on a car you have unfortunately just lost. Chances are if you had to take out a big long-term loan to buy your new car, suddenly having to cough up $4,500 or so would really hurt your bank balance – if not be impossible.

Taking out a long-term loan is popular in Canada. CBC News reported that in 2018, 55 % of all new car loans were for at least 84 months (7 years). Unfortunately, people forget that having a loan over a long number of years does come with risks.

What else do I need to know about what GAP Insurance covers?

  • GAP Insurance is not just available if you purchased your vehicle, it also includes leased vehicles.
  • Traditionally, GAP Insurance was only sold through the dealer when purchasing a vehicle. However, this was expensive, the dealer was often not knowledgeable about the product and they also were not the ones who would handle your claim.
  • Obvi has completely changed GAP Insurance; by bringing the sales process online and cutting out the middleman, consumers can save up to 70%, there is no sales pressure and confusing technical jargon and consumers get a better product at a fair price.

To find out more about what GAP Insurance covers and if you are eligible, check out our GAP Insurance page or get an easy Instant Quote now.

Can I cancel Gap Insurance from the dealership?

Can I cancel gap insurance from the dealership?

You bought a car from the dealership – congratulations! The whole process can be draining and take a long time, especially when you have to sit through sales pitches for add-on products. Ended up purchasing an insurance product with a deal you realized is really expensive? No worries, in some cases you can cancel gap insurance from the dealership.

3rd Party Policies

If you have purchased a 3rd party policy, you should be able to cancel your Gap Insurance policy at any time at a pro-rata rate. What exactly does this mean? It means you get a refund for the unused portion of the policy – but when it comes to cancelling “the sooner the better” is true .

Why Gap Insurance with Obvi is different

For more information about Gap Insurance, read our explainer blog here.

Gap Insurance is an important insurance policy, but you don’t deserve to be paying thousands for it. Obvi is the only fully online solution in Western Canada, meaning that we cut out the middleman saving you money. By being online, it also means that you don’t have sales or time pressure and can purchase when you are ready and have conducted as much research of your own as you like.

Why would I want Gap Insurance?

CBC News reported that in 2018, 55 % of all new car loans were for at least 84 months (7 years). Unfortunately, people forget that having a loan over a long number of years does come with risks. Here are some points to think about;

  • “I’m a sensible driver, I’m not going to crash my car…” Hopefully you won’t ever be in an accident, but what if it is stolen? Or there is a fire? Not everything is always in our control, so if you have a long term loan, you want to have reassurance that you will be financially covered in case something happens.
  • The worst case; you don’t want to be left with a loan and no car- this can happen, and that’s why you need protection.

GAP Insurance is there to help protect your finances and give you peace of mind. We sometimes forget the financial risks and ties that are associated with our vehicles, and we also often forget that some events are outside our control such as theft or accidents. With Obvi you can purchase GAP Insurance online. Find out more about GAP coverage and get a free quote now.

Should I Buy Extended Warranty on a New Car?

Should I Buy Extended Warranty on a New Car?

Whether or not you should buy extended warranty on a new car is a common question. The debate is not just whether to buy an extended auto warranty at all, but whether it is worth it for a new car. Obvi has some advice on the matter;

Buying when new vs waiting

Obvi.ca has brought Extended Warranty and GAP Insurance fully online in Western Canada, meaning that you no longer have to buy from the dealer. Although this means you can buy at any time whilst your vehicle is eligible, you might want to know that it will cost a little bit less buying it straight away rather than waiting closer to the time that your warranty expires.

Also, in those few years between the purchase of the new car and the manufacturer’s warranty expiring, your initial extended auto warranty quote may become more expensive as the rates could increase. A quote you receive is valid for 30 days.

We often get asked the question; why am I not eligible for Extended Warranty? Usually, it’s because the manufacturer’s warranty has expired. With our busy lifestyle, it is easy to forget exactly when this expiration date is, and an Obvi policy can only be bought if you have at least 30 days of the manufacturer’s warranty left. So you don’t forget, you might want to buy it right away so you know you are covered.


Be prepared before you get the dealership sales pitch

It’s always a good idea to do some research on whether you should buy an Extended Warranty on a new car before you purchase your vehicle at the dealership. Why is that?

    • Pressure – you don’t want to be pressured into something that you potentially know nothing about once you have already decided to purchase your vehicle. After making a deal on the car, you just want to finalize the payments and leave as quickly as possible. Instead, dealing with the finance office often takes time and you can feel pressured in to making a decision. When you buy anything in life, it’s not great to feel pressured into a purchase from a salesman, even if it is something you might be interested in.
    • Understanding the product – it’s very important that you understand what the warranty you are purchasing is, including the small print. You need to take your time to know what is included and excluded in the policy, what the coverage is, what the financial implications are (meaning are they suggesting rolling it into your monthly payments, and how much will this cost you in total) and so on.
    • Knowing whether you got the best deal available – don’t just take the word of the salesman! Do your own research and see if you could be buying a better product at a fraction of the price.

Find out more about Obvi’s Extended Auto Warranty or GAP Insurance, and get a quick quote online.

Obvi In The News – Calgary’s Business

Obvi  discusses the insurtech space and how Obvi is re-imagining extended warranty and GAP insurance with Calgary’s Business. Read the full article here or visit  the Calgary’s Business Website.

https://calgarysbusiness.ca/calgarys-movers-and-shakers/technology-re-imagine-insurance/

Obvi sells extended warranty and GAP insurance policies direct to you. Go to Obvi.ca and get a free instant quote and protect yourself from unexpected repair bills.

Check out our blog to learn more about vehicle warranties and what to know when deciding how to protect your investment.

Which Cars Have The Best Warranty?

When researching your next new or used vehicle purchase it’s a good idea to consider which one comes with the best vehicle warranty. All new cars, trucks, and SUVs come with a manufacturers comprehensive and powertrain warranty.  Most comprehensive manufacturer warranties are 3 years/60,000 km or 4 years/80,000 km with powertrain coverage generally being longer. Whats the difference between comprehensive and powertrain?

Comprehensive WarrantyPowertrain Warranty
·        Covers defects in workmanship on most all working parts of the vehicle such as electrical, fuel systems, air conditioning·        The powertrain warranty covers the parts of a car that provide power and make it move. This is the engine, transmission and drivetrain.

 

Other types of vehicle warranties included from the manufacturer:

  • Hybrid/Electrical powertrain coverage is also provided for a separate term and varies amongst automakers, but most are around 8 years/160,000km.
  • Roadside assistance is also included with new vehicles and ranges anywhere from 3 to 6 years or 60,000km to unlimited km’s.
  • Some manufacturers provide varying terms of coverage for certain components such as emissions, radio systems, batteries and other wear parts.
  • Manufacturers include varying terms of rust perforation warranty on new vehicles.

Its important to read the fine print of any warranty and understand the various levels of coverage.

Which car comes with the best car warranty in Canada? That goes to Mitsubishi offering the overall best vehicle warranty at terms of 5 years/100,000 km for the comprehensive coverage and the best powertrain warranty at 10 years/160,000 km.  You can decide for yourself which car company has the best vehicle warranty depending on what your needs are. A list of the current coverage each manufacturer offers for its comprehensive and powertrain warranties is provided at the end of this blog to help you determine which car has the best warranty for you.

Regardless of the type of vehicle considered, you may notice that all the manufacturers warranty’s have something in common: coverage generally expires long before it is truly needed.  Each manufacturer has determined when they can offer protection without having to charge for it and this equates to what is known as manufacturers warranty. Once the time or distance allowed has been exceeded, an extended warranty is needed for further coverage.

What’s the best extended car warranty? We have discussed this topic in previous blog posts to some extent but here are some additional things to consider. Automotive retailers are in a position to offer:

  • A third-party warranty, most likely in form of an insurance policy
  • Extended coverage from the manufacturer, most likely in a “service contract”

What is often misunderstood at this point is that the automotive dealer is selling a policy or contract for which they have no overview or administration role in the event of a claim. The sales agent has a laundry list of tactics and years of sales training to earn a commission. Car buyers should look online for alternatives and ask a lot of questions. Don’t feel pressured to immediately buy the extended warranty at the time your purchasing your new vehicle.

Here are some things you should be concerned about:

  • Transfer/Cancellation options– your needs are always changing does your warranty support that?
  • Time and Distance –Don’t let years of coverage trump KM’s. Make sure the extended warranty doesn’t expire before 160,000 Km’s
  • Offer of a “no claim credit”– If it sounds to good to be true it usually is. Typically you pay a premium for this and getting the money back is rarely a straightforward process and might require the purchase of a new vehicle from the same dealer.
  • Fine Print– You mostly need to be concerned about what isn’t covered – fancy brochures won’t be brought out when a claim happens.
  • Price– Shop around, rarely do you get a reasonable price for extending a warranty at a dealership.

Find out more about Obvi and our Extended Warranty and get a free quote now.

How Does GAP Insurance Work?

How Does GAP Insurance Work?

 

How does GAP Insurance work?  As a relatively new insurance product to most people, many often ask this question. First, one of biggest downsides to purchasing a new vehicle is depreciation. Research suggests the average vehicle depreciates by 11% the minute you drive off the lot and an additional 14% by the end of the first year.  So how does that compare to your loan balance?  When you factor in long term loans, low to no down payments, and all the dealer’s fees and interest loaded into the loan, you can owe significantly more than your vehicle is worth.

So, what happens if your vehicle is a total loss before the loan obligations are complete? The amount your car insurance provider pays on your totaled car, SUV, or truck has nothing to do with your loan balance.  They will pay you a predetermined book value and you will be responsible for the remaining loan balance.

How GAP insurance works is by paying you the difference between your insurer’s settlement and your remaining loan balance. It is an add-on car insurance coverage that can help vehicle owners cover the “gap” between the amount they owe on their car and the car’s actual cash value in the event of fire, theft, or accident. If you’re financing a vehicle for a dollar amount that’s larger than what the vehicle is worth, GAP insurance can be a very good idea to protect yourself financially.

Obvi GAP insurance allows you to finance your vehicle with peace of mind knowing that your loan obligations are covered in the event of a total loss. It pays the difference between your insurer’s settlement and your loan balance, up to a maximum of $40,000. Get a free instant quote today and protect yourself against financial hardship tomorrow.

Should I buy the extended warranty for a used car?

Should I buy the extended warranty for a used car

Should I buy the extended warranty for a used car?

 

Extended auto warranty can be excellent peace of mind when buying a new or used vehicle, but is a used car extended warranty worth it? Where is the best place to buy an extended warranty for a used car?  The reality is that vehicle repairs can be hard on your wallet and while maintenance helps, sometimes you just can’t avoid these expensive repairs.  A good extended warranty is an excellent option when getting a used vehicle but here are a seven important things to consider:

1.Stability: Dealers will likely have the option to sell you a “warranty contract” vs the insurance policies offered by independent providers. Insurance policies have several advantages with financial stability and ability to pay claims topping the list.

2. Cost: Peace of mind is great but at what cost? Like most products sold in the dealer finance office, you have the option of looking around to avoid the often large commissions.  The question ” Should I purchase extended warranty on a used car? ” often comes down to cost vs benefit. Shop around, it can save you a lot of money.

3. What’s covered (or not): Warranty providers have been famous for lavish brochures listing what is covered, but the real question is: what’s not covered? Considering most of us can’t name the components that make up our vehicle how do you know what isn’t included? Look for warranties based on what isn’t covered much like you would with house insurance.

4. Repair Shop: You deserve the right to choose where your vehicle is repaired. The choice should be yours whether it’s your local dealership or favourite repair shop. Should you choose to get extended warranty on a used car, make sure you have that option.

5. Transfer and Cancellation: Life changes quickly and an extended auto warranty is a long term investment. A good product will allow for transfers and cancellations if need be.

6. Eligibility: Extended warranties are often difficult and more expensive to purchase after the manufacturers comprehensive warranty has expired so if you are considering a used vehicle find out it if it has a 3 year/60,000 km, 4 year/80,000 km, or 5 year/100,000 km comprehensive warranty that is still valid. If it does you can extend it with a product that makes sense.

7. Term: Make sure the length of the extended car warranty gets you maximum value for the price. Considering most major mechanical breakdowns occur after 5 years and 100,000 km, paying many thousands of dollars for a warranty that doesn’t go beyond just isn’t worth it.

Buying an extended warranty on a used car should be a straightforward and easy process that doesn’t come with a lot of confusion, cost, and regret. Should you decide to buy extended warranty on a used car avoid aggressive sales pitches and do some research before committing.

See our extended warranty page for more information and try an instant quote.