Guaranteed Auto Protection (GAP)

If you totaled your car today, would you have to continue making the payments? It is entirely possible not to!

Insurance would cover most, but more than likely not the entire loan amount, because of dramatic depreciation on new and late model automobiles. Unfortunately, this scenario happens most when there is a car accident, and it leaves people “upside down,” or owing more on their car than it is worth.

Guaranteed Auto Protection, or GAP, insurance kicks in when the amount your insurer pays for your totaled or stolen car, is less than what you still owe on the loan (minus any delinquent payments, late charges, refundable service warranty contracts, or other insurance related charges). Not only does it cover the remainder of your loan balance (up to 125% of MSRP for new auto, or 125% of NADA for used auto), it will also give you $1,000 toward a new car financed at First Californian within 90 days of the accident. GAP also covers your insurance deductible, up to a maximum of $1,000.

What Does GAP Cover?

  • New or used vehicles such as: Automobiles, Vans, Light Trucks, and SUV’s

We recommend GAP in the following instances:

  • You are financing for more than 48 months
  • You are purchasing a car and not putting at least 20% down
  • You are rolling debt from your last auto loan into your current auto loan

Why do you need GAP?

  • Protect your credit rating
  • Cover Losses that your insurance will not cover
  • When you drive your new car off the dealer’s lot, it depreciates 10%-15%
  • One vehicle is stolen in the US every 27 seconds
  • Every year a half a million vehicles are totaled due to accident, fire, and theft

You can add GAP to an existing car loan, or you can get it the same time you get your loan. We have many members that sing the praises of GAP insurance!

A Typical Example:

After just one year, the vehicle you purchased for $25,000 is valued at $22,000. You still owe $20,000, but with a value is $18,000 when it is stolen and not recovered, or is involved in an accident in which it is damaged beyond repair. Most insurance policies will only reimburse you for the value of your vehicle ($16,000), less your deductible. If the deductible was $1,000*, the insurance company would pay $16,000, leaving a $4,000 loan balance.

The following is a typical example of how GAP Advantage helps you:

Original purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,000

Loan balance after one year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,000

Insurance settlement covering vehicle’s current value . . . . . . . . . . . . . . . . $16,000

Your lost investment without GAP:

Remaining unpaid loan balance (the “GAP”) . . . . . . . . . . . . . . . . . . . . . . . $4,000
(Including your deductible, up to $1,000)**

GAP waives the difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,000

Provides up to $1,000 towards the financing or lease of a replacement vehicle . . . . . $1,000

Total GAP Advantage Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,000
**Deductible waiver is available in most, but not all states. Please consult your financing representative for the availability of this benefit.

Extended Auto Warranty Coverage – Major Mechanical Protection

Purchasing a new or used vehicle can be a big investment. Mechanical breakdown is not the first thing you think about when buying a vehicle, but you should consider it. Mechanical breakdowns can happen anywhere, at any time, no matter the make, model, or year of your car.

Are you financially prepared for a breakdown? Any mechanical breakdown can be costly. Not only do you have to pay for the repairs to your vehicle, but you may have to cover the costs of a tow truck to take your vehicle to the nearest repair shop, and a rental car while your vehicle is in the shop. All of these add up quickly, especially on top of an already big repair bill.

So, what can you do to protect your investment? First Californian, in partnership with Route 66, offers the finest protection available for new and used vehicles. Similar coverage through an auto retailer can cost you over 35% to 40% more.

Benefits of MBP

  • Your coverage is backed by a top-rated insurance company
  • MBP does not require you to have a repair work performed at any specific location
  • Outside of your deductible, in most cases there are no “out-of-pocket” expenses
  • Additional benefits* include:

  • Nationwide Protection
  • 24-hour roadside assistance for the term of your coverage
  • Rental vehicle assistance
  • Transferable coverage if you sell your vehicle before your agreement expires

*These benefits may not be available in all states. Check your contract for specific details.

The Bottom Line

This could happen to you: Did you know that one in three vehicles experience a mechanical failure in a given year? The typical warranty owner will make several claims during the life of their agreement. Should your vehicle experience a failure after the manufacturer’s warranty expires, without an extended warranty, you will have no protection from the unexpected repair costs that can cost thousands of dollars!

Vehicles today are growing extremely complex and contain high-tech sensors, electronics, and computers that frequently suffer unexpected failure and need to be replaced. While engines and transmissions are more reliable than ever, it’s these other sophisticated parts that frequently fail. As vehicles become increasingly more complex, associated repair costs rise dramatically!

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