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Whether you buy the latest model or something with a lot of miles, your new vehicle is a big investment. And the purchase price is just the beginning. You’ll also need to be prepared for many future expenses, from filling up at the pump to monthly auto loan payments. Even if you paid in cash, your vehicle will still require regular upkeep, repairs, insurance payments, and other expenses.  

Owning a vehicle can cost thousands of dollars per year, so it’s important to take steps to protect yourself from unexpected expenses. Having the right insurance and other forms of coverage can help you avoid the stress and financial burdens that result from an accident, breakdown, or theft.

If you have a new car or are shopping for one now, here are four valuable coverage options that can help you worry less and enjoy your vehicle more.

1. Car Insurance

Obviously, this one’s a must. Auto insurance is required for drivers in most of the country – including Pennsylvania and New Jersey – because it helps protect you and others from the high financial costs that can result from car accidents, like repairs, medical bills, and legal disputes

To avoid overpaying, you’ll want to compare car insurance rates, consider a higher deductible to keep your premium lower, and make sure your coverage is a good fit for the way you drive and your type of vehicle (a cheaper used car probably doesn’t need the priciest coverage). American Heritage members can access affordable insurance options through our partnership with TruStage® Insurance, available exclusively to credit union members.

2. Guaranteed Asset Protection (GAP)

If you’re financing your new ride, GAP coverage is a smart option. When used on top of a standard car insurance policy, this non-insurance program helps protect auto loan borrowers from being stuck with potentially thousands of dollars in debt if their vehicle is stolen or totaled.

Here’s how that could happen: If your vehicle is declared a total loss, your auto insurance will cover the cost of your vehicle, minus your deductible and depreciation. And depreciation (the decline in your car’s resale value) happens quickly.

According to CARFAX®, new cars can lose more than 20% of their resale value in the first year. Particularly if you have a longer term on your auto loan, there could be a huge “gap” between what you still owe on your auto loan and what your insurance will pay to replace your vehicle.

With GAP coverage, you won’t be stuck with the unpaid loan balance on a car you no longer own. Instead, you can put more of your money toward a replacement. 

3. Mechanical Breakdown Protection (MBP)

If you buy a new car, truck, or SUV, chances are it comes with a bumper-to-bumper and/or powertrain warranty, which guarantees that the manufacturer will cover the cost of repairing certain types of mechanical problems during a specified period of time or number of miles. This is a great protection and valuable perk for buyers of new cars.

But what if something goes wrong once the car warranty has expired?

You’ll be on the hook for the full cost of those repairs – unless you have MBP, which provides an extended warranty with coverage similar to what you had before. 

The coverage does not apply to parts damaged in an accident, nor does it cover routine maintenance. It can, however, cover many defective, expensive-to-fix parts and systems (like your engine or transmission). MBP comes in different coverage levels, so you can choose the option that fits your budget.

It’s a great way to enjoy more peace of mind on the road – and spend a whole lot less on mechanical issues.

4. Debt Protection

For many drivers, an auto loan is essential. But sometimes, unexpected events can make it difficult to make payments or pay back the loan in full. Debt protection is a valuable, non-insurance plan that can provide financial support for you and your family if times get tough.

This coverage helps protect the driver and their family from financial hardship by canceling some or all of the unpaid loan balance due to a qualifying event like a disability, loss of a job, or the death of the policyholder.

Like other forms of coverage, you never want to use it, but it’s great to know you have it.

STAY READY FOR THE ROAD AHEAD

At American Heritage, we’re here to support our members’ financial well-being and help them prepare for unexpected financial challenges. Along with low-rate auto loans and convenient car buying services, we offer a wide range of programs to help protect you, your money, and your vehicle.

Whether you’re looking for auto insurance quotes or want additional protection for your car, turn to us for the affordable options you need.