What is the Vehicle Protection Plan?

Vehicle Protection Plans

Mechanical Breakdown Protection (MBP) & Guaranteed Asset Protection (GAP). Having a factory warranty is great…until it runs out. The Vehicle Protection Plan is a mechanical breakdown service contract designed to keep you covered so you don’t have to pay out of pocket for future unexpected repairs. We offer five different levels of comprehensive coverage plans to keep your vehicle protected while you own it.

How this plan helps you

Your vehicle is a big investment, so it’s important to keep it protected. Because even though many new cars and trucks come with comprehensive factory warranties, once you reach the year or mileage limit – you’re on your own. That means you’ll have to pay out of pocket for any repair, and that could get expensive. Which is why we offer various levels of protection to fit any budget.

What is Guaranteed Asset Protection (GAP)?

If your vehicle is ever declared a total loss due to an accident, theft or natural disaster, your auto insurance company might only pay you the amount equal to their assessed market value of your vehicle. Unfortunately, there may be a significant gap between what your insurer pays and the balance you owe on your vehicle loan. Guaranteed Asset Protection (GAP) protects you by waiving the difference.

• How this plan helps you

Insurance companies can only do so much, that’s why GAP Loss Protection was designed to fill in the gap. When accidents occur, insurance companies only pay the actual cash value of your vehicle, so we cover the difference between the actual cash value and the balance.

• What it covers

In the unfortunate event your vehicle is declared a total loss due to an unrecoverable theft or accidental damage, your auto insurance company will typically pay the current market value of your vehicle less your deductible. But what if your loan or lease balance is higher than the market value of your vehicle? Answer: You would be responsible for paying off the difference, including your deductible. This can be expensive!

The reason for the potential difference is that normally the loan/lease balance decreases at a predictable amount as monthly payments are made. However, the market value of your vehicle is influenced by several variable factors (e.g. supply, demand, mileage). This means that market value often may be lower than your outstanding balance – particularly early in your contract when you have the most to lose.

• Mechanical Breakdown Protection (MBP)

The average new car is out of warranty in just two and a half years, and with advanced electronics and “integrated systems,” repairing or replacing parts is more expensive than ever … and that’s not even considering labor costs! Unfortunately, as time goes on, the likelihood of mechanical failure of your vehicle is inevitable.

However, MBP, also known as Major Mechanical Protection (MMP), helps you protect yourself against the expense of future costly repairs. The total cost of MBP for new and pre-owned vehicles is often far less than the cost of a single repair! Pay for MMP once, and in most cases, you’ll not have to pay anything more than a small deductible should a breakdown occur.

• How GAP Coverage and Extended Warranties Can Help You Save

A new car can take up a sizable chunk of your budget. But to keep yourself on firm financial ground when you do decide to purchase your dream car, you need to think beyond your monthly loan and insurance payments. There are two important protections that could help you save a bundle on your next car purchase: GAP (Guaranteed Asset Protection) coverage and an extended warranty coverage plan. Both are designed to cover your costs in case of the unexpected. GAP coverage will help you pay off your loan if your car is totaled and an extended warranty coverage plan can help make those expensive repair bills more affordable.

Why do I need GAP coverage?

If your car is totaled, your car insurance plan will typically pay replacement value. And while it sounds great, you might find that you owe more on your vehicle loan than the actual value of the car.

The situation isn’t as uncommon as you might think. A new car loses value the minute you drive it off the lot, and if you’ve made a small down payment or have a long loan term, there could be a sizable difference between your car’s value and the remaining balance on your vehicle loan. While you may wind up with enough cash to replace your car with an equivalent vehicle, you could still be stuck paying off the loan on a vehicle that doesn’t exist.

That’s where GAP coverage comes in. It pays the difference between what your insurance agency will give you for your car and what you owe on your car. Meaning, your GAP protection can help you avoid paying off the remaining difference on your vehicle loan for a car you don’t have. And while the car dealership may encourage you to buy GAP coverage for a hefty price, you can usually find it at a reasonable cost if you shop around.

Why do I need an extended warranty?

You probably already know what an extended warranty is for. Once your manufacturer’s warranty is up, the extended warranty kicks in to provide long-term coverage for any car problems you may run into. And while you may feel secure in a brand-new car, they can have mechanical problems occur from time to time, just like a used car would. When you run into those problems after your initial warranty has expired, an unexpected car repair bill can really put a damper on your day.

Car repairs can be pricey, and that unexpected hit to your budget could potentially put you in a situation where you might need to tap into your emergency savings. An extended warranty plan can help buffer you from those costs.