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Being upside down on a car is what happens when you
owe more than the car is worth. It's not really a big deal
until you're looking to trade in or something happens to the vehicle
and your insurance company will only cover the market value. Here's
a not so fun fact: a new car will lose
30 percent of its value the day you drive it off the lot.
Your fifteen thousand dollar new ride just became a ten thousand five hundred
dollar has-been
just by jumping in the driver's seat and "scooping the loop."
Because of this, your car salesman and finance manager will no doubt mention
that you should buy GAP insurance.
This is a costly add-on for you with significant mark-up for the dealership.
GAP insurance covers the amount you owe over and above what the insurance
company would cover.
It essentially covers "the gap." Pretty clever, right?
A little-known fact is that you can buy the same GAP insurance from your credit
union.
It will cost you significantly less, in most cases, thirty to fifty percent less.
The same is often true with that extended warranty
they're always so adamantly trying to tack on.
Both items carry a very high profit margin for a car dealership.
So, before signing the dotted line on those fancy new wheels,
make sure you stop by the credit union so we can save you some money!
If you're wanting to further educate yourself on buying a car click one of
these three videos,
or if you're interested in other financial literacy content
visit our YouTube channel.