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May 17, 2017

Debunking the 3 biggest myths of truck and trailer protection

By: Patrick Lien, Insurance Product Manager

Let’s clear the air on myths existing around vehicle protection.

With 12 years in the insurance game, I’ve heard it all as to why people choose not to purchase protection. Unfortunately, many times, they’re making a huge financial decision without having all the facts. In this blog post, I’ll explore common myths about vehicle protection, so when the time comes, you’ll make the decision that’s best for you, your business and your family.

Myth 1: “I don’t need to purchase protection for my financed vehicle since I’m already insured.”

Fact: some primary insurers offer protection, even GAP protection, but it’s only for personal vehicles. No Canadian insurer offers GAP protection for financed commercial vehicles. This means if an insurer writes off your truck or trailer, you’re still liable to pay the difference of your vehicle’s value and the amount owing on your lease or loan out of your own pocket.

Myth 2: “The cash value of my vehicle will remain close to my financing balance early on in my lease or loan.”

Fact: once your commercial vehicle leaves the dealership, its value sharply decreases. The cash value of your vehicle and cost of your outstanding lease or loan could differ as much as 40 per cent within the first two years of your financing, depending on your equipment type.

Myth 3: “Vehicle protection through a financing company is too expensive.”

Fact: rather than pay for your vehicle protection premium upfront, you can bundle that cost into your regular lease payments. Our flexible payment options and finance terms ensure we’ll find payments that work for your budget.

Sample claims

Still don’t believe me? Here’s a sampling of actual claims paid out:

GAP payment & deductible
British Columbia owner-operator - GAP: $26,511.81 - Down payment: $16,186.00 - Deductible: $2,500.00 Total claim paid: $45,197.81	Alberta owner-operator - GAP: $38,378.20 - Down payment: $12,423.18 - Deductible: $2,500.00 Total claim paid: $53,301.38
Ontario owner-operator - GAP: $19,737.81 - Down payment: $14,187.75 - Deductible: $5,000.00 Total claim paid: $38,925.26	Nova Scotia owner-operator - GAP: $22,889.55 - Down payment: $18,444.85 - Deductible: $5,000.00 Total claim paid: $46,334.40

Downtime protection
Manitoba owner-operator - Monthly lease payment: $3,255.00 - Accident Downtime protection was selected at beginning of lease - Vehicle (Class 8 truck) was involved in a significant accident and repairs took six months to complete Total claim paid: $18,770 (six months of lease payments minus seven-day wait period)	Quebec owner-operator - Monthly lease payment: $2,977.00 - Mechanical Downtime protection was selected at beginning of lease - Vehicle’s (Class 8 truck) experienced power train failure and repairs took five months to complete Total claim paid: $14,190 (five months of lease payments minus seven-day wait period)

Keeping your financial future safe

If you’re in an accident and your commercial vehicle is a total loss, owing money on your lease or loan is the last thing you want to worry about. With the Vehicle Protection Plan, CWB National Leasing will cover your loss and get you back on the road fast.

Learn more about CWB National Leasing’s Vehicle Protection Plan or get protection now.

Posted in Equipment leasing advice,