That new vehicle may be your pride and joy, but unless you’ve bought an exceptionally in-demand model, a new vehicle typically loses about 20% of its original value as soon as you take delivery. Keep in mind that doesn’t change the balance you owe on your vehicle loan.
For the time being, you have what’s called negative equity; meaning, you owe more on your loan than your vehicle is actually worth. In a few years, the balance on your loan and the vehicle’s value will even out. At that point, if your vehicle is totaled or stolen, your primary insurance will probably cover about what you owe.
Your purchase of MEMBER’S CHOICE™ Guaranteed Asset Protection is optional and will not affect your application for credit or the terms of any credit agreement required to obtain a loan. Certain eligibility requirements, conditions and exclusions may apply.
Please contact your loan representative, or refer to the Member Agreement for a full explanation of the terms of MEMBER’S CHOICE™ Guaranteed Asset Protection (GAP) or Contact Us to request additional information or a complimentary quote right now.
* Gerson Lehrman Group, ‘Majority of Drivers Plan on Holding on to Vehicles More Than Ten Years,’ 2010
Not NCUA insured. Not Obligations of the Credit Union. May Involve Investment Risk and Loss of Principal.
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