The average car depreciation rate for a new car is almost 50% after five years of ownership.
If you have an accident and your car is a total loss or if it is stolen, that reduces the amount your insurance company will pay you. You could end up losing a lot of what you have already paid towards your loan. But with Depreciation Protection Waiver (DPW) coverage your positive equity is safe.
What is Depreciation Protection (DPW)?
Depreciation Protection (DPW) protects your vehicle equity and hedges against depreciation over the life of the loan. In the event of a total loss, DPW provides a waiver benefit equal to the difference between the vehicle value at the time of purchase, less the loan balance at the time of loss up to a maximum waiver benefit of $10,000, or the outstanding loan balance.
DPW is ideal for those who:
Finance 90% LTV or less
Put money down
Trade in a vehicle
Make accelerated loan payments
Need to protect equity
Benefits of Protection
Auto Deductible Reimbursement Benefit of $500 per loss for 2 years
Coverage can be purchased at anytime
Protection for collision
Life-of-loan protection
No mileage or year restrictions
Protection for theft and fire
Protection for vehicle depreciation
Watch this video to learn how DPW works
Owe more than your car is worth?
If your auto loan has a high loan to value (LTV), you would probably benefit more from Guaranteed Asset Protection (GAP). Learn more about GAP.
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Refinances
In the event the loan is refinanced, the DPW coverage terminates.
DPW Exclusions
1. Cars and Trucks valued over $75,000 (MSRP or J.D. Power Retail)
2. Commercial Vehicles titled partially or entirely under a business, used to deliver goods, or carry passengers for compensation. Uber and Lyft are not considered Commercial.
3. Loan terms greater than 84 months
4. Leases, balloon notes, full cash purchases
5. Salvaged or reconstructed titles
6. Motorcycles, RVs, boats, golf carts, or any other recreational vehicles
7. Vehicles with VINs less than 17 digits in length or manufactured before 1981
Refunds
DPW may be cancelled within the first 60 days for a full refund. After 60 days from the DPW effective date the DPW waiver is refundable via the 90% Pro Rata refund method after 60 days. In the event of a DPW claim, the fee charged to the borrower will be deemed fully earned and therefore no refund will be due. Your institution is responsible for initiating, calculating and making payment of any refund due to the borrower in the event of early payoff.
Claims
A DPW claim must be reported within 60 days of the primary insurance declaring the vehicle a total loss or within 180 days of the accidental death protected event.
Devidot Credit Union serves members across Delaware with 8 full-service branches and offers convenient account access from anywhere using its secure Online Banking and highly-rated Mobile App.
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