By Brent Carroll, RCB Bank Lending
New cars can quickly depreciate in value causing your auto insurance to pay less than what you owe on your car loan. What happens when an accident totals your car? Who pays the difference between the insurance settlement and your outstanding loan balance? You do. Or, maybe not.
Get$Fit Tip: Protect your assets.
It may be worth buying Guaranteed Asset Protection (GAP) coverage to help you avoid the risk of negative equity and having to continue making principal payments after a total loss. Depending on your loan term, GAP adds on average an estimated $7-$111 to your monthly loan payment, but it potentially could save you thousands of dollars in the event of loss.
When GAP may benefit you:
• You make a small or no down payment on a new car
• You agree to a loan term longer than 48 months
Talk to a lender for details to see if GAP is right for you.
Our lenders are happy to answer your questions, even if you are not an RCB Bank customer. Connect with a lender in your area.