At Farm Bureau Bank, we understand that purchasing a vehicle is a significant investment, and we want to help you protect that investment. That's why we offer two types of coverage that can provide valuable protection in certain situations: GAP and MMP.
GAP Coverage
Guaranteed Asset Protection [GAP] will help pay off or reduce the remaining value of your loan if the vehicle is totaled or stolen. While your insurance will cover the vehicle's value when filing a claim, this often only partially pays for the amount left on the vehicle loan. This is where Guaranteed Asset Protection comes in – covering the remaining loan balance not paid for by insurance.
GAP is a great option when:
- Purchasing a new or higher-cost vehicle
- No down payment or small down payment is made
- A lot of miles are going to be put on the vehicle
- Any negative equity from a trade-in valued less than the amount owed was added to the loan
- Loan term is greater than 48 months
GAP may be added to a loan at the time of financing or purchased up to 12 months from the effective date of the loan. When initially purchasing a vehicle, don’t overpay for GAP coverage by automatically financing with the dealership; you may get more competitive pricing by using Farm Bureau Bank.
MMP Coverage
Major Mechanical Protection coverage [MMP] protects your vehicle beyond the manufacturer’s warranty and covers the cost of most manufacturer-installed mechanical or electrical parts. Life happens, and repairs could cost thousands of dollars - but thanks to MMP, the only out-of-pocket cost is the plan’s deductible. For example, even a seemingly small oil leak often requires taking apart and repairing a section of the car’s engine. The labor involved, in addition to parts replacement, could quickly push into the four-figure territory. Being covered with an MMP plan would help to reduce or eliminate out-of-pocket expenses for this type of repair.
We offer several Major Mechanical Protection plans, each covering a vast selection of vehicle parts. Additionally, MMP comes with other benefits such as on-site emergency roadside assistance, key fob replacement, and rental vehicles; and unlike GAP, Major Mechanical Protection can be purchased at any time, and does not require a loan account with Farm Bureau Bank.
What is the key difference between GAP and MMP?
The key difference between GAP and MMP coverage is the type of events that they cover. For example, GAP coverage is designed to protect against financial loss in the event of a total loss, while MMP coverage is designed to protect against the cost of repairs and replacements due to mechanical or electrical breakdowns. As such, the type of coverage that you choose will depend on your unique circumstance.The Bottom Line
GAP and MMP coverage are two types of insurance policies that can provide valuable protection for vehicle owners. GAP coverage protects against financial loss in the event of a total loss, while MMP coverage protects against the cost of repairs and replacements due to mechanical or electrical breakdowns. When considering whether to purchase these types of coverage, it's essential to consider your own circumstance, and we're happy to answer any questions you may have about them.
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