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Saab owner? Add gap to your car insurance

Des Toups

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CarInsurance.com

Saab car insuranceSaab’s 20-year death spiral ended Monday with a liquidation filing in a Swedish court.

That’s bad news for the “Born from Jets” automaker’s hardcore fans, whose hopes for a Chinese rescue had been dashed again and again and are now gone for good.

And it’s worse news for the 9,000 or so buyers who braved a Saab dealership since General Motors set the marque free in February 2010. The company announced Tuesday it would suspend warranty claims currently in its system and no longer provide warranties on the roughly 3,000 brand-new vehicles remaining on the lots.

That means your Saab is no less quirky than it was last week, but it is certainly worth a lot less.

“Demand for used Saabs will start to drop off 2 percent - 3 percent immediately,” Alec Gutierrez, senior market analyst at Kelley Blue Book, told Smart Money.

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New Saabs, already advertised at $10,000 off sticker, will fall even further.

If you’re a Saab owner who bought high, drive carefully. Factory replacement parts may become difficult to come by (though many internal parts still bear the fingerprints of GM and Subaru, previous manufacturing partners).

The bigger reason to be careful?  If you walked out of a Saab dealership last summer, happy to have scored a new 9-5 Turbo AWD sedan at 20 percent off, your sweet deal may have turned sour.

With the cars worth less, the chances your car insurance company will total your Saab after an accident are higher. “It costs just as much to replace the airbags today as it did last week,” says Penny Gusner, consumer analyst at CarInsurance.com, “but the repair makes up a bigger portion of the car’s value now that a Saab is worth less.”

And the size of the check your car insurance provider will write you just shrank. No one knows for sure by how much. Anyone know what a Daewoo is worth these days?

You can buy gap insurance on a Saab even now that will cover the difference between what the car is worth and what you owe. In fact, Gusner says, it’s usually cheaper to buy through your car insurance company than it is from your lender. Figure the cost will be 5 percent of whatever you’re paying for comprehensive and collision coverage. (See “What gap insurance does -- and does not -- cover.”)

The good news for some buyers is that GM will honor warranties on Saabs sold through its dealerships before February 2010.

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