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It’s not surprising to see a vintage or a classic car roaming the roads these days as the popularity of old vehicles seems to just grow with every year passing. There are a lot of people who appreciate the classic designs and spend a lot of their time and money just to restore some of the vehicles that were produced decades ago. Gatherings and expose of classic and vintage cars seem to just get bigger and more diverse so that’s a real indicator of how widespread the thing is. However, besides the enormous amount of work a classic or vintage car typically requires in order to be restored into a working condition there’s one more thing that can push up the cost of having such a car – insurance.

Don’t worry, there’s no real problem with insuring a classic or retro vehicle that you’ve restored with your own hands. You can just go to any conventional car insurance provider and get car insurance quotes for your vehicle. But there are certain things that will certainly look strange to say the least. First of all your car insurance quotes will be much higher than for an average vehicle due to the unique nature of your vehicle and high risk associated with its use. But at the same time the actual market value of your vehicle that puts base to collision and comprehensive coverage will be considerably lower due to the massive depreciation that car was subject to in decades after its initial production. As a result you will typically get a policy that costs a lot and doesn’t cover you to full extent. Besides, most conventional car insurance providers simply lack qualified specialists who would be able to repair a vintage car correctly. So. do you really want such coverage for something you’ve devoted a lot of time and money into?

The most viable option for retro and classic car owners to consider is of course buying insurance from companies that specialize in covering such vehicles. There are plenty of providers that do this and you can find out more about them in your local classic car club or a larger expo. First of all, such companies have the necessary specialists to perform qualified repair in case your car gets hit or damaged. Most companies often have lower car insurance quotes for vintage vehicles since they have a large pool of such customers due to their initial specialization in this domain. And you will get enough coverage in case of an accident as opposed to conventional insurers. Still there are certain limitations with specialized providers.

The first limitation of all your yearly mileage will be limited according to the driving capabilities of your vehicle and its age. If you exceed the set amount there will be costly penalties charged. Moreover, you will have to store your car in a closed garage in order to get car insurance in the first place since the insurer wants to make sure that the car won’t be stolen or hit by accident. Yet, assuming that such vehicles are rarely used as a primary car in the household and are only driven during weekends or on special occasions such as expos, mileage and storage won’t be a big problem for most owners.

There are many types of coverage provided by auto insurance including collision and comprehension. Drivers are familiar with liability coverage but may be less familiar with GAP coverage which is intended for drivers with car loans. This type of insurance is specifically for things, like cars, that depreciate in value over time. Because of depreciation, you will at some point during the loan period owe more on your car than it is worth.

Car Value

Most insurance policies cover the market value of cars at the time of damage. So, if your car is totaled in an accident, you will only be compensated for its value at that point in time. Multiple factors go into the calculation of value including current mileage, condition, and age of your car. This can be problematic if you owe more on your loan than you would receive from your insurance company.

Value Depreciation

Your car’s value begins to depreciation as soon as you purchase it and continues to depreciate over time. Experts suggest that a brand new car loses about 10% immediately when it leaves the dealer’s lot and will lose nearly 40% of its value within five years of purchase. This is the reason you can end up owing more on your car beyond what your insurance provider is willing to pay.

Closing the GAP

GAP insurance is exactly what its name suggests – it pays for the difference, or gap, between what is needed to pay off your car loan and your current insurance coverage. If you lease your car, it is not uncommon for the car lender to include GAP insurance premiums as part of the lease payment. The cost for GAP insurance tends to be small. Since it is typically affordable, you should consider getting GAP coverage in case your car is totaled before it is paid off.

GAP Benefits

In addition to being inexpensive, GAP insurance is considered to be supplemental insurance. It is not intended to replace your regular auto insurance. GAP insurance is easier to get than traditional insurance because it is limited in what it covers. Premiums can be larger for high-risk drivers but GAP is still attainable. GAP insurance can protect you from a lawsuit instigated by your car loan lender. If you are unable to pay the difference between the payoff amount and coverage, they have every right to take you to court to get their money. A judgment against you can result in garnished wages or other collection activities which can be disruptive to your life.

And GAP coverage can protect your good credit record. By having sufficient coverage, you do not have to worry about owing your lender money which can negatively impact your credit score. This, in turn, can result in higher auto insurance rates in the future. The advantages of GAP insurance are well worth its cost.