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GAP Insurance

If your vehicle is totaled or stolen,do you know what will happen to your loan payments?

That new vehicle may be your pride and joy but here’s a reality check. Unless you’ve bought an exceptionally in-demand model,a new vehicle typically depreciates about 22% in its first year; and at five years,a car has lost about 55 percent of its new-car value.1 Unfortunately,that doesn’t change the balance on your vehicle loan. For the time being,you have what’s called negative equity. You owe more than what the vehicle’s worth.

Years later,the balance on your loan and the vehicle value will even out. At that point,if your vehicle is totaled or stolen,your primary insurance will probably cover about what you owe. Until then,MEMBER’S CHOICETM Guaranteed Asset Protection (GAP) can help cover the gap and help protect you from a potential loss of thousands of dollars.

People are extending their loan terms to lower their payments,which means they have negative equity risk even longer; 38% of auto loans in 2012 had terms of 5-1/2 to 6 years1 and the vast majority of consumers say they now plan on keeping cars for 10 years or more.2

You can deflect some of this risk by adding GAP to your vehicle loan. If your vehicle is stolen or totaled,GAP will help cancel the difference between the primary insurance settlement and what you may still owe. That could be a big relief if you need to come up with a down payment and replace a stolen or totaled vehicle immediately.

With the rising cost of vehicles,fast depreciation and longer vehicle loan terms GAP may be a smart option to add helping to cover the negative equity gap.

Stop in to one of our locations and sign up now!

1Edmunds,“How Long Should My Car Loan Be?”,,May 2013
2TIME,Business & Money,“Driver Consensus: It’s Silly to Upgrade Cars Every Couple of Years”,,July 2012

Disclosure: Your purchase of MEMBER’S CHOICETM Guaranteed Asset Protection (GAP) 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 GAP. If you choose GAP,adding the product fee to your loan amount will increase the cost of GAP. You may cancel the protection at any time. If you cancel protection within 90 days you will receive a full refund of any fee paid. You will receive additional information before you are required to pay the fee for this product.



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Elkton,MD 21921
410.398.0032 fax
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