TALLAHASSEE, Fla., March 26, 2015 /PRNewswire/ — Receiving a hefty tax refund can be as joyful as Christmas in March or April. The goods you can buy are endless. Maybe even treat yourself to that new car you’ve had your eye on – after all, you work hard and deserve it.
This year, millions of taxpaying Americans will use refunds toward the purchase of a vehicle-related item, and more than one out of five of those people will use that extra cash to buy a new car. Unfortunately, this exciting moment can be ruined by one simple mistake – failing to purchase a guaranteed asset protection (GAP) waiver.
“Sometimes the unexpected happens. It doesn’t make sense to invest so much in a new vehicle without ensuring that you’re fully protected,” said Tim Meenan, executive director of the Guaranteed Asset Protection Alliance. “Without the reassurance a guaranteed asset protection waiver offers, consumers could get stuck with an unpaid loan for a vehicle they no longer own.”
It’s important for car buyers to know that the moment they drive off the lot with a new car, the value of the vehicle depreciates. If disaster happens in the form of theft or an accident that totals the car, insurance will often only cover the current market value – which can be far less than the value of the unpaid loan. The purchaser will be responsible for paying off the loan, even though he or she may no longer have the car.