How To Keep Your Car From Ruining Your Life

Most of us rely on our cars every day. But how many of us are prepared to cover the bills if our car breaks down or we get into an accident? What would you do if you were facing a $4,000 transmission repair on Old Faithful? Or what if your brand new car gets stolen?

If you’re an automotive mishap away from an empty savings account and a pile of debt, read on.

There are two kinds of inexpensive insurance you should consider that can keep your dream machine from becoming a financial nightmare: Mechanical Repair Coverage and Guaranteed Asset Protection (GAP) insurance.


Mechanical Repair Coverage is essentially an extended warranty that can keep you covered long after the manufacturer’s warranty expires. It protects you from footing the bill on a wide range of (potentially very expensive) mechanical problems.

It does not cover regular maintenance stuff like oil changes and brakes pads, however—that’s called Maintenance Insurance, and that’s a whole other story.

Who needs it? Anyone with a car you’d like to keep running that is no longer under the manufacturer warranty or has a warranty that’s about to expire. (As long as the car is under 10 years old and with less than 100,000 miles on it.)


Need-to-Know: Mechanical Repair Coverage

  • Pays for covered repairs, ranging from a punctured oil pan to a whole new engine.
  • Any vehicle under than 10 years old/100,000 miles is eligible, even if it’s not financed with the credit union. Includes motorcycles and RVs.
  • Can be added at any time, not just when you buy or refinance the vehicle.
  • Also includes life savers like rental reimbursement, roadside assistance, and emergency travel expense coverage.
  • Available in different plan levels to match your driving habits and budget.
  • Cost can be rolled into your loan for easy payments.


Guaranteed Asset Protection (GAP) Insurance fills in the gap (get it?) between what the insurance company thinks your totaled car is worth and how much you still owe on the loan.

Example: let’s say you paid $28,000 for a new car, and six months later it gets stolen. Your insurer will likely pay you somewhere in the neighborhood of $20,000. (Because new cars lose an average of 30% of their value in the first year.) That’s an $8,000 difference on the loan that still needs to be paid.

The good news? You had GAP insurance, so it’s not your problem.


Who needs it? Anyone who is looking to buy a new car or a used car that has a reputation for losing value quickly, or if you put less than 20% down.

Need-to-Know Guaranteed Asset Protection (GAP) insurance

  • Steps in when your car is stolen, damaged beyond repair or otherwise declared a total loss by your insurance company
  • Covers the difference between what your insurance company pays for the totaled car and the balance left on your loan (usually up to 125%).
  • Our GAP allows for another $1,000 as down payment toward a replacement vehicle (some limitations apply).
  • Can be added after you buy the vehicle, usually for much less than you would pay at the dealership.

Guadalupe Credit Union offers low-cost Mechanical Repair Coverage and GAP insurance just for credit union members. Interested? Stop by or give us a call today!