Any time you purchase a new vehicle, you want to ensure your financial interest is protected. There are a number of ways you can do this:
Also known as the “Waiver of Depreciation”, the OPCF 43 Removing Depreciation Deduction can be added to your insurance policy when purchasing a new vehicle. Coverage is available for 2-5 years; and if your vehicle is written off in an accident, you will usually be paid the original purchase price, (tires, batteries and betterments are not covered), all applicable taxes and less any deductible. The OPCF43 endorsement states that insurance companies will pay the least of:
Here’s an example: you purchased a new 2019 vehicle for $45,000 that’s written off in 2022. With the OPCF 43 coverage, you will receive approximately the purchase price of $45,000, less any deductible.
GAP coverage is purchased from a dealership when a vehicle has been financed or leased to ensure that the remaining balance will be paid. If your vehicle is written off in an accident, it covers any outstanding balance owing on your loan or lease after your claim is settled.
Optiom Prime Vehicle Replacement is a new product available through Newman Insurance, which is available for up to seven years on both new and used vehicles. If a vehicle is written off in an accident, Optiom will pay towards a replacement vehicle once the primary insurance company has paid.
The main difference between Optiom and the OPCF43 coverage is that Optiom takes into consideration that vehicle prices will increase every year.
Let’s look at the above example once again with the Optiom coverage: you purchased a new 2019 vehicle for $45,000 that’s written off in 2022. Your insurance company factors in the depreciation and calculates your vehicle’s actual cash value to be $27,000 (a deductible may apply). It’s determined that a 2022 replacement vehicle will cost you $50,000.
Once your insurance has paid the $27,000, Optiom will pay an additional $23,000 towards the purchase price of a replacement vehicle.
When purchasing a used vehicle, it’s best to purchase the Optiom coverage at the same time to ensure you ‘lock in’ its value before it depreciates. Vehicle models up to 10 years old can qualify provided they have collision and comprehensive coverage.
Example: you just purchased a used 2013 vehicle for $14,000 that’s written off three years later. Your insurance company factors in the depreciation and calculates your vehicle’s actual cash value to be $9,800 (a deductible may apply).
Once your insurance has paid the $9,800, less any deductibles, Optiom will pay an additional $4,200 towards the purchase price of a replacement vehicle.
Optiom also offers the following value-added options:
If you are interested in a quote or have any questions, please contact us today.