Author Topic: Need for 5-year New Vehicle Protection Coverage - Car Insurance  (Read 1515 times)

IngaB

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  • Posts: 19
Hello everyone,
I need your advice on car insurance.

We received our car insurance renewal package in the mail yesterday and our monthly premium went up 16 % (we never had a car insurance claim in our lives).

I called the insurance company and they say that this is because they added the coverage called "5 year new vehicle protection" to our policy. With this particular coverage we are protected against the depreciation of the vehicle for up to 5 years from the date it was purchased. If your vehicle is deemed a total loss, we can have it replaced with a new one, provided we have purchased this coverage.

Advantages
In the event of a total loss, the vehicle will be replaced with a new one
In the event of a partial loss, the vehicle will be repaired with new parts
If this product expires during the policy term, coverage will be extended until the renewal date.

Do we need this thing? It adds $25 a month to our monthly premiums....

About the car
2016 Lincoln MKZ Hybrid
Purchased for $45,500 in December 2015 (new)
Fully paid off

My gut feeling tells me to remove this particular coverage but I wanted to check with the mustachian community first.
Thank you in advance for your comments.

IngaB

RWD

  • Magnum Stache
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  • Posts: 3327
  • Location: Mississippi
Re: Need for 5-year New Vehicle Protection Coverage - Car Insurance
« Reply #1 on: March 14, 2017, 04:27:50 PM »
No, you don't need it.

As a side note, you could save a lot of money by selling the luxury barge and buying something older and cheaper. But whether that makes sense depends on your current financial situation.

IngaB

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  • Posts: 19
Re: Need for 5-year New Vehicle Protection Coverage - Car Insurance
« Reply #2 on: March 14, 2017, 04:33:28 PM »
Thanks RWD
Husband really wanted that car and worked a couple of part-time jobs (in addition to the full time job) to save for it. Other than that we live pretty frugally. Both work, have a paid off house and live on less than 1 salary.
IngaB