Thinking about a new or “new to you” car? Having a reliable set of wheels is a crucial part of our daily lives, but it’s also a big financial decision that will likely impact your budget for the next several years. You know you’ll need to protect your ride with car insurance, and maybe even get a AAA membership, but are you aware of these programs offered by SESLOC that give you financial peace of mind?
Guaranteed Asset Protection
Guaranteed Asset Protection, or GAP, protects your vehicle loan in case your car is totaled or stolen (declared a total loss by insurance) while you’re still making payments. Imagine you finance a new car for $30,000 with a five-year loan at 3% interest. Two years later, you’ve paid it down to just over $18,500 — and then a driver smashes into it while it’s parked on the street, totaling it completely. You have Collision & Comprehensive insurance coverage, but that will only pay out $16,800 since that’s the current market rate for your car’s year and mileage. But what if you owe more on your loan than what’s covered by insurance? If you opted for GAP coverage on your loan, your policy will cover the “gap” between your car’s depreciated value and the remainder of what you owe. If you don’t have GAP, you’re simply on the hook to pay that difference out of pocket, which can limit your options for a replacement car.
Mechanical Breakdown Insurance
Car repairs are not cheap, no matter the age of your vehicle. Fixing your back-up camera can easily run $500, and more expensive repairs like your transmission can cost over $3,500. Mechanical Breakdown Insurance, or MBI, may help limit unexpected covered repair costs on your vehicle, potentially saving you thousands of dollars in repairs. Most factory warranties expire within three years, so the extended coverage can give you peace of mind as your car ages.
Life can take some unexpected twists and turns, and unfortunately, the surprises are not always good ones and may disrupt your finances. If you get injured, for example, your disability income will likely be a fraction of what you’re used to — adding financial stress on top of an already stressful situation. That’s where Debt Protection comes in. If you opt to add Debt Protection on to your loan with SESLOC, your payments are covered in the event of disability, unemployment, or loss of life.