Service Plus Credit Union

Financial Smarties: GAP and Mechanical Breakdown

Posted on April 23, 2021 at 8:13 PM by Service Plus

After publishing our post Financial Smarties: The Smart Way To Buy A Car, we had a few people ask "What about that insurance they try to sell you when buying a car? What is it and do I need it?"

Guaranteed Asset Protection (GAP) pays the difference between what your auto insurance says your car is worth and your remaining loan obligation on the car in the case of a total loss.  Newer vehicles can lose value quickly after you purchase them causing this scenario quite often.  Of course you hope you never need it, but if you do, you're glad you have it.

Mechanical Breakdown Protection helps ease the pain of car repairs not related to an accident. Like an extended warranty the mechanical breakdown protection pays for repairs to a car in excess of the manufacturers warranty. Mostly these protections cover systems such as exhaust, transmission, drivetrain, engine and power.  It does not cover normal maintenance costs such as tires, brake pads, filters, spark plugs or fluids. 

Costs for both of these types of coverage can be substantially less at Service Plus then what you’ll find for similar and sometimes even less protection elsewhere.  So if you are planning on purchasing a vehicle soon, be sure to give us a call first.

Categories: Financial Smarties

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