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Changing the game of vehicle total loss protection

March 2, 2019 - by Patrick Redo

 

Let’s say you just bought an awesome new car valued at $25,000. Because you are a super negotiator, you were able to talk down the dealer into a selling price of $22,000. And because you are a superior saver you put $7,000 down on that new car.  And best of all, you acquired a $15,000 loan from allU.S. Credit Union to cover the rest.

Here’s the bad part. Two weeks later you are on your way to the grocery store and some irresponsible driver slams into your new car. Everyone is fine your car is severely damaged.  Now what do you do?

Here is a typical scenario without Depreciation Protection

Obviously you have comprehensive insurance.  Your car insurance company has valued your totaled vehicle at $20,000 (instead of $25,000 because it looses value as soon as you drive it off the car lot).  So, they pay off your $15,000 car loan balance and send you a check for the remaining $5,000.

But here’s the problem. You only have $5,000 for a down payment, instead of $7,000 and you have to negotiate the deal all over again.

Here’s the scenario with Depreciation Protection

Obviously you have comprehensive insurance.  Your car insurance company has valued your totaled vehicle at $20,000 (instead of $25,000 because it loses value as soon as you drive it off the car lot).  So, they pay off your $15,000 car loan balance and send you a check for the remaining $5,000. (This sounds all to familiar, right?  Here’s where everything changes).

In addition to your regular insurance, allU.S. Credit Union provided Depreciation Protection with your loan, which locked in the value of your vehicle at $25,000.  Which means, your car will maintain its value for the lifetime of the loan.  Let’s break this down.  The equity in the car totals the $3,000 you were able to negotiate off the sale price, then there’s the $7,000 down payment.  So that’s $10,000.

With the appropriate Depreciation Protection Policy, you would get $10,000, which means you have $15,000 to put down on a new vehicle.

The Depreciation Protection payout will never be more than the amount you owe on your loan.  So, let’s say you have an accident several years after you purchase the car instead of in the first two weeks.  You’ve made years of payments, so you only owe approximately $8900 on the car.  That’s how much Depreciation Protection would pay you at the time of your accident.

Click the link for additional info. (https://www.youtube.com/watch?v=zLxyD3XB_yE)

To see if this coverage is right for you contact us for additional information and ask us about our upcoming auto loan campaign “Packing On The Perks”.

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