Allow me to set the scene. You walk into your dealership and you make a fabulous purchase. When it comes time to leave the dealership, you enter the Financial Services Manager’s office to deal with some paperwork before you go. That’s when you find out that your expenses are far from over.<\/p>\n
According to them, you need an extended warranty, a tire warranty, rustproofing, stain protection, an anti-theft device, and a QPF5: replacement insurance commonly known as the dealer\u2019s replacement value. It\u2019s a good product, of course. For a few dozen dollars a month, it guarantees you a new vehicle in the event of total loss of your vehicle. It\u2019s almost silly not to take it. If you say no, it sometimes gives you the impression that you\u2019re upsetting the director of financial services.<\/p>\n
I\u2019m exaggerating? Not really, as directors are certainly upset when they don\u2019t sell the famous QPF5 insurance policy. Why? Because their profit margin is very, very high. What they don\u2019t tell you is that your insurance broker, the one you\u2019ll be dealing with if you ever need to make a claim, has the same product with even more comprehensive coverage at a cost several hundred dollars less. Even worse, for the first year, the traditional replacement value insurance may even be available for a few dollars.<\/p>\n
So you call your broker, and he or she tells you \u2013 I have what the dealer has, but better, with my services and knowledge, and it\u2019s more flexible and less expensive. Now you\u2019re all in a quandary\u2026.<\/p>\n
Aside from a few minor differences from one product to another, what all the replacement value products and replacement insurance offer is to replace your vehicle with a new one in the event of total loss. Basically, if your 2012 Honda is worth $15 000 at the time of the accident, and a 2015 goes for $20 000, you would receive $20 000. It\u2019s very practical, as you might still have a $16 000 loan on the vehicle. It\u2019s also practical if you haven\u2019t respected your lease\u2019s yearly mileage or if your lease agreement REQUIRES you to use new replacement parts in the event of an accident. Practical in the sense that you don\u2019t have to pay out of your own pocket after an accident\u2026.<\/p>\n
In such a case, the replacement insurance available through your broker or dealership, or even your automobile contract\u2019s traditional replacement value insurance will do the job. But the devil\u2019s in the details. When you\u2019re looking forward to getting the keys to your new wheels, you seldom read the details.<\/p>\n
In essence, it\u2019s the least expensive product. The price is based on a percentage of your premium. Four years of your replacement value premium should roughly equal that the premium for insuring your vehicle for one year. This means that if your yearly automobile premium were +\/- $500, your replacement value insurance would cost roughly $500 extra over 48 months. It also means that you can settle your loss through only one insurer. You will also be able to replace your vehicle with an equivalent new model of the make and model of your choice. However, you\u2019re not required to replace it. Do you find it all too expensive or are you changing vehicles? You can cancel at any time at no charge. On the other hand, if you have several claims, your coverage may be withdrawn or cancelled.<\/p>\n
The two products are similar whether they are provided by the dealership or your broker, but there are three major differences: the premium should be roughly $500 less with your broker; if the new model isn\u2019t to your liking, with your broker you won\u2019t be required to replace your vehicle with the same make and model; if you decide to sell your vehicle or cancel this coverage, you\u2019ll be required to pay a much higher penalty at your dealership.<\/p>\n
Still not convinced? Contact us the next time you change your vehicle and we\u2019ll go over the points one by one. Happy travels!<\/p>\n","protected":false},"excerpt":{"rendered":"
Allow me to set the scene. You walk into your dealership and you make a fabulous purchase. When it comes time to leave the dealership, you enter the Financial Services Manager’s office to deal with some paperwork before you go. That’s when you find out that your expenses are far from over. According to them, […]<\/p>\n","protected":false},"author":23,"featured_media":394,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[48,61,46,103,106,104,105],"class_list":["post-225","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-automobile","tag-broker","tag-car","tag-dealership","tag-insurer","tag-replacement-insurance","tag-replacement-value","sector-auto","sector-personal"],"acf":[],"_links":{"self":[{"href":"https:\/\/lareau.ca\/en\/wp-json\/wp\/v2\/posts\/225","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lareau.ca\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lareau.ca\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lareau.ca\/en\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/lareau.ca\/en\/wp-json\/wp\/v2\/comments?post=225"}],"version-history":[{"count":0,"href":"https:\/\/lareau.ca\/en\/wp-json\/wp\/v2\/posts\/225\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lareau.ca\/en\/wp-json\/wp\/v2\/media\/394"}],"wp:attachment":[{"href":"https:\/\/lareau.ca\/en\/wp-json\/wp\/v2\/media?parent=225"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lareau.ca\/en\/wp-json\/wp\/v2\/categories?post=225"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lareau.ca\/en\/wp-json\/wp\/v2\/tags?post=225"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}