Cars Protection Plus Explains What Happens When Your Vehicle Has a Recall


What is a recall?

When a vehicle or some of its equipment poses a safety risk to drivers and passengers, either the National Highway Traffic Safety Administration (NHTSA) or the vehicle’s manufacturer will issue a recall. Recalls can happen for any number of issues such as safety issues with a vehicle’s air bags, tires, steering, brakes, among many other possibilities.

Usually, the car’s manufacturer will voluntarily issue the recall when they discover a defect that doesn’t meet safety standards. The NHTSA will also issue one after the manufacturer files a report with them. The NHTSA says vehicle manufacturers must notify owners by mail within 60 days of the report being filed.

While recall service is usually free, other repairs you might agree to outside of the recall can be costly. Investing in a reliable and comprehensive service plan from Cars Protection Plus can help you cover any repairs not covered in a recall.

What if I haven’t been notified of a recall?

 If you suspect a recall and haven’t been notified, you can either call the vehicle manufacturer or check the NHTSA recall database. You can sign up to receive recall alerts via email from them.

Another way to ensure you’ll get notified in the event of a recall is to register both your new and used vehicles with their manufacturer and notify them if you move.

What do I do if I receive a recall notice?

First, read the recall notice. It should detail the safety issue with your vehicle and the equipment affected. It will also include:

  • A description of the issue or defect
  • Why it is being recalled
  • What the safety risk is

It will also tell you to have the issue repaired at an authorized local dealer. Usually, a dealer will be very helpful in scheduling repairs for the recall. If you have difficulty scheduling with the dealer, call the vehicle’s manufacturer and ask for help. If neither one is helpful, you can file a complaint with the NHTSA against them.

Don’t put off the recall repairs. The recall was issued due to a safety issue. The best thing is to get it repaired as soon as possible. If the manufacturer has said in the recall that driving the car isn’t safe, you should limit use of the car until the necessary repairs are made.

 What solutions will the vehicle manufacturer provide?

 According to the NHTSA, by law the manufacturer must correct the issue in one of three ways. They can repair the vehicle or part at no cost to you. If the problem cannot be fixed, they can provide you with an identical vehicle or a similar model. They could also issue you a refund for the purchase price of the car minus some depreciation costs, depending upon how long you have had the vehicle and how many miles it has on it.

Do I have to pay for the repairs?

Usually, you do not have to pay for the recall repairs. The manufacturer is typically responsible for fixing any recall issues for you at no charge.

If you bought a used car and there is a recall that the original owner did not repair, you can still get recall work done. A recall lasts eight years from the original sale date of the vehicle. Used vehicles more than 10 years old may NOT qualify for free repairs, though you can contact a local dealer and ask.

Gap Insurance vs Loan/Lease Payoff: Cars Protection Plus Discusses Whether You Need Either One

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You know about all different kinds of vehicle insurance, but what is gap insurance? Guaranteed asset protection (gap) insurance is usually for loans or leases on new cars that have never been titled before. Gap insurance is good to have if your car is stolen or totaled and you owe more on your loan than your vehicle’s depreciated value.

Gap insurance and loan/lease coverage can be purchased through various auto insurance companies, through some auto dealerships and through extended warranty policy providers such as Cars Protection Plus.

Is gap insurance really necessary?

Let’s say you purchase a new car for $30,000 and take out a car loan for $28,000. When driving off the parking lot of the dealership, you know your car just lost some value. According to the Insurance Information Institute (III), when you drive a brand-new vehicle off the lot, its value immediately decreases about 10% in the first month and up to 20% in the first year. It continues to decrease in value over time.

Continuing this example, a year after you’ve had the car, you total the car in an accident. Your auto lender has required both collision and comprehensive insurance on the vehicle, so your auto insurance company will pay the auto lender up to the car’s depreciated value. If your car is worth $24,000 at the time of the accident or theft, auto insurance will cover up to that amount. But you will still owe your auto lender $28,000, which means you will owe your auto lender the $4,000 difference between the depreciated value and the loan amount.

Will I still be liable to pay the full loan amount if my car is totaled?

Yes. You are still on the hook for the original loan amount, regardless of whether the car is totaled or stolen. This is where gap insurance comes in handy. With gap insurance, the gap insurer will pay the difference between what auto insurance covers and the original loan amount. Usually, you’ll need to have both collision and comprehensive coverage on a car in order to purchase gap insurance.

What is loan/lease payoff coverage?

Loan/lease payoff coverage is similar to gap insurance and some companies use the term interchangeably. If your car is stolen or totaled, loan/lease payoff coverage will pay up to 25% of your car’s actual cash value after your auto insurance company has paid you.

Gap insurance usually needs to be purchased within 30 days of the car’s purchase or lease while loan/lease payoff coverage can be purchased at any time you own or lease the vehicle. Loan/lease is also good for used cars, since true gap insurance is usually only offered early on in owning or leasing a new car.

Anytime you finance more than 30% of your car and think you may be upside down on the loan for any amount of time, you should consider either purchasing gap or loan/lease coverage. Both gap insurance and loan/lease coverage are relatively affordable as coverage providers don’t assume much risk and they are usually for a short duration.