Did you know that in the U.S., one car is stolen every 27 seconds? And of those, 47% are never recovered? Have you considered how you would financially protect yourself if it happened to you? You might think, "I have car insurance, so I don't have to worry about it." But did you know that when the loss occurs, if your car's value is less than the balance of your auto loan, your policy might not provide the financial protection you need? That means if your insurance won't cover your full loan amount, you'll still have to pay off the balance of your car loan.
The good news is, Redmond Credit Union offers protection that can cover you.
Guaranteed Asset Protection, or GAP, covers the difference between the value of your car and the balance of your car loan. Let's take a look at a real-world example.
Let's say one year after you purchase your car, it gets stolen. We'll estimate that you still owe $20,000 on your auto loan. Let's also say your car was worth $16,000 when you lost it. The insurance company only pays you $16,000. So now you have no car and you still owe $4,000 on your auto loan. In most cases, GAP Protection will completely take care of that remaining $4,000, including the deductible. That is a lot of peace of mind, for just a few dollars a month.
If you recently bought a new car, chances are that you still owe more than the car is worth right now. This is called being "upside down," and most car owners are in this situation for the first several years of their new car loan. GAP is especially beneficial if you are putting little to no money down on your car or if you have extended your payments over a longer term.
If you decide to roll previous loan balances into your new loan, GAP will only cover up to 125% of the value of your new car at time of purchase, but this can still be a huge help.
At Redmond Credit Union, you pay a flat rate of only $450. That's it. This cost can be rolled into your loan, so if you have a 5 year loan, that's only about $5 a month. Compare that to most car dealers who charge from $599 to $799 for the same coverage!
MBP (Mechanical Breakdown Protection), also known as an Extended Warranty, is automobile protection that extends beyond the manufacturer's factory warranty and covers repairs of unexpected mechanical breakdowns. For the period of time the contract is in effect, you are assured that covered components of your vehicle will be repaired in the event of failure, including labor, subject to any applicable deductible. Redmond Credit Union offers several great plans to fit any car or budget.
Probably not! Gap can be purchased at anytime. We recommend within the first 18 months when the greatest depreciation is most likely to occur. Your vehicle does not need to be under manufacturer's warranty to purchase either GAP or MBP. MBP can be purchased at any time even if you don't have a loan on your vehicle! Coverage begins immediately and will expire according to the time/mileage of the Contract selected, whichever occurs first.
Your car is an important investment. Now that you have the facts, make sure you have the coverage you need. Most car dealers will offer GAP or MBP, but Redmond Credit Union can usually offer the same protection for much less, so be sure to ask us before you buy! To learn more about Redmond Credit Union's GAP or MBP plans, please call us at (646)-239-1157 or +1(929) 251-1431, or click here: