Newsletter

Protecting Your Wallet from Auto Claims

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GAP Insurance for your Vehicle

In today’s automobile market, a vehicle may begin to depreciate the minute it is purchased. Typically, a vehicle’s outstanding loan balance is higher than its Actual Cash Value (ACV), especially during the first few years of the loan. So what happens if your vehicle is totaled or stolen? Have you ever heard of the term “upside down?”

Insurance settlement is based on the ACV of the vehicle not the loan balance you have with your lender. GAP (guaranteed asset protection) insurance will pay for the out of pocket or “upside down” amount if your loan balance is higher than what your vehicle is worth.

For example:

Vehicle Actual Cash Value: $11,000.00
Insurance Deductible: $1,000.00
Insurance Settlement: $10,000.00

Loan balance: $16,000.00
Insurance Settlement: $10,000.00
Deficiency Balance You Owe: $6,000.00
GAP INSURANCE PAYS: $6,000.00
You Owe: $0

VSECU offers GAP insurance on any new or existing auto loan. The cost is approximately $250 per policy during the life of the loan. On a four year loan this added protection can cost as little as $5 per month and can be rolled into the monthly loan payment.

The GAP benefit not only provides the difference between the loan balance and vehicle value, but will also cover the $1,000 deductible and $1,000 towards the purchase of a new car if you finance it with VSECU.

Mechanical Breakdown Protection

Statistics show that 80% of all repairs come after your factory warranty has expired. Did you know that the standard American automobile has between 14,000 – 15,000 parts? If your vehicle broke down would you be able to pay in cash for the repairs? How would you get to work when your car is being repaired?

VSECU also offers Mechanical Breakdown Protection (MBP) for your vehicle repair needs. This coverage is designed to keep you and your vehicle on the road no matter where you travel in the United States. This protection has no deductible, and has 24/7/365 emergency roadside service. Mechanical Breakdown Protection includes car rental allowance and these additional services:

  • Flat Tire Assistance
  • Towing
  • Battery Jump Starting
  • Lock-out Service

Last year VSECU saved members who purchased Mechanical Breakdown Protection $23,639.39 in car repair bills.

If you would like to add GAP or MBP to your new or existing VSECU auto loan please contact a Member Service Consultant for more information at 802/800 371-5162.