Home » Green Loans » Debt Protection

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.


Peace of Mind
The good news is, there’s protection that can cover you. It’s called GAP. 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.

Who should purchase GAP?
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.


How Much Does GAP Cost?

At SMCU, you pay a flat rate of only $350. 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!


Even More Protection
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. SMCU offers several great plans to fit any car or budget.

Is It Too Late?
Probably not! You can purchase GAP up to 60 days after the loan is funded. You can purchase a MBP warranty at any time during the life of your loan.

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 SMCU can usually offer the same protection for much less, so be sure to ask us before you buy! To learn more about SMCU’s GAP or MBP plans, please call us at 800-334-2489 or 206-398-5500, or click here:

MemberSafe for consumer loans

EquitySafe for Home Equity Loans

Did You Know?

Building green isn't just about improving your health or saving the planet. Other benefits include increased property value, better return on investments,and increased sales and leasing potential.

Learn More »