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Key takeaways
- Caribou add-on coverage products are optional and aren’t required to refinance your car.
- GAP waiver may help if your car is totaled or stolen and your insurance payout is less than what you owe.
- Vehicle service contracts, Powertrain VSC, and Mechanical Breakdown Insurance may help with certain covered repairs.
- Key, tire, windshield, dent, and roadside coverage can help with common ownership costs.
- Before adding coverage, review the cost, exclusions, deductible, claim rules, cancellation terms, and state availability.
When you refinance your car loan through Caribou, you may have the option to add coverage products to your new loan. These products can help with certain costs tied to car ownership, such as covered repairs, lost keys, tire damage, or a total loss.
Add-on coverage is optional. It isn’t required to refinance, and the right choice depends on your car, budget, driving habits, and how much protection you want beyond your standard auto insurance.
What is add-on coverage?
Add-on coverage refers to optional products you can add when refinancing your auto loan. These products are designed to help with specific costs that your loan or standard car insurance may not fully cover.
For example, car insurance may help after a covered accident, theft, or weather-related event. But it usually won’t pay to replace a lost key, fix a covered mechanical breakdown after your warranty ends, or cover the difference between your insurance payout and loan balance after a total loss. That’s where some add-on products may help.
The main thing to know: add-on coverage isn’t one-size-fits-all. Some drivers may want extra protection, while others may decide they’d rather keep their loan amount lower.
Thinking about including an add-on coverage?
See your auto refinance options through Caribou and choose the loan — and optional coverage — that fits your needs.
Caribou add-on coverage options at a glance
| Coverage option | What it may help with | Who may want to consider it |
|---|---|---|
| GAP waiver | A loan balance after a total loss | Drivers who owe more than the car may be worth |
| Vehicle Service Contract | Certain covered repairs | Drivers with an aging car or expired warranty |
| Powertrain VSC | Major engine, transmission, and drivetrain repairs | Drivers who want protection for major systems |
| All-in-One Coverage | Key, tire, windshield, dent, and roadside issues | Drivers who want broader everyday protection |
| Cosmetic Protection | Dents, windshield chips, tires, rims, and roadside help | Drivers who want help with road-hazard or appearance-related costs |
| Key & Remote Protection | Lost, stolen, or damaged keys and remotes | Drivers with expensive smart keys or key fobs |
| Mechanical Breakdown Insurance | Certain covered mechanical repairs | Eligible California drivers comparing repair coverage options |
GAP waiver
GAP stands for guaranteed asset protection. A GAP waiver may help if your car is totaled or stolen and your insurance payout is less than the amount you still owe on your loan.
That difference can happen when your vehicle depreciates faster than your loan balance goes down. It may also happen if you rolled negative equity into your loan, made a small down payment, or chose a longer loan term.
GAP waiver may be worth considering if you owe more than your vehicle may be worth. It may be less useful if you have strong equity in the car or you’re close to paying off the loan.
To understand how this works in a total-loss situation, read more about what happens to negative equity if your car is totaled.
Vehicle Service Contract
A Vehicle Service Contract, or VSC, may help pay for certain covered repairs after a manufacturer’s warranty expires. Depending on the contract, it may cover parts and labor for specific mechanical or electrical issues.
A VSC isn’t the same as car insurance. Insurance usually helps with covered accidents, theft, liability, and damage from certain events. A VSC is focused on covered repairs tied to mechanical breakdowns.
A VSC may make sense if your car is older, your warranty has ended, or a major repair would be hard to pay for out of pocket. It may not be the right fit if your car is still under warranty, you don’t plan to keep it long, or the coverage doesn’t match the repairs you’re most concerned about.
Learn more about vehicle service contracts and extended vehicle protection.
Powertrain VSC
A Powertrain Vehicle Service Contract focuses on the systems that help move your car, such as the engine, transmission, and drivetrain.
This can be a more targeted option than a broader VSC. It may appeal to drivers who want help with major repair costs but don’t need coverage for as many vehicle systems.
Powertrain coverage won’t cover everything. Before adding it, review the covered parts, exclusions, deductible, claim process, and whether your vehicle qualifies.
Learn more about what a Powertrain VSC covers.
All-in-One Coverage
Caribou’s All-in-One Coverage bundles several types of protection into one product. Depending on availability and plan terms, it may include benefits for roadside assistance, key replacement, tire and wheel coverage, windshield repair, and paintless dent repair.
This type of coverage may be useful if you want help with everyday car ownership issues that can be inconvenient or expensive. For example, replacing a key fob, repairing a windshield chip, or getting roadside help can add up.
It may be less useful if you already have similar coverage through your insurance, auto club membership, manufacturer warranty, or another plan.
Learn more about what’s included in Caribou’s All-in-One Coverage.
Cosmetic Protection
Cosmetic Protection may help with certain appearance-related and road-hazard issues, such as small dents, windshield chips, tire damage, rim damage, and roadside assistance, depending on the plan.
This coverage may be worth considering if you drive often, park in high-traffic areas, or want help managing smaller repairs that can still be frustrating and costly.
Before adding it, check what types of damage are covered. Cosmetic Protection may not cover every scratch, dent, tire issue, or windshield problem.
Key & Remote Protection
Modern car keys can be expensive to replace, especially if your vehicle uses a smart key, remote, or push-button start system. Key & Remote Protection may help cover the cost of replacing or repairing eligible keys or remotes if they’re lost, stolen, or damaged.
This coverage may be helpful if you don’t have a spare key or if replacing your key would be costly. It may be less important if your replacement cost is low or you already have coverage through another provider.
Learn more about car key replacement coverage.
Mechanical Breakdown Insurance
Mechanical Breakdown Insurance, or MBI, may help pay for certain covered mechanical repairs. It’s similar in some ways to a vehicle service contract, but it’s regulated as an insurance product and availability may vary by state.
For Caribou customers, MBI is available only in California. If you’re eligible, it may be worth comparing MBI with a VSC to see which product better fits your car, budget, and repair concerns.
Learn more about Mechanical Breakdown Insurance.
How to decide whether add-on coverage is worth it
Add-on coverage may be helpful, but it also adds cost. If the cost is included in your new loan, it may increase the amount financed and the total amount you pay over time.
Before adding coverage, ask yourself:
- How much does the coverage cost?
- Will the cost be paid upfront or added to the loan?
- What’s covered?
- What’s excluded?
- Is there a deductible?
- Are there claim limits?
- Do I already have similar coverage?
- How long do I plan to keep the car?
- Could I afford the repair, key replacement, or out-of-pocket cost on my own?
- Can I cancel the coverage later, and how would any refund work?
The best add-on coverage is coverage you understand and feel comfortable paying for.
What add-on coverage usually doesn’t cover
Add-on products don’t cover every car expense. Coverage varies by product and contract, but exclusions may include routine maintenance, pre-existing issues, normal wear and tear, collision damage, cosmetic damage, or repairs that aren’t approved under the plan terms.
For example, a Vehicle Service Contract may help with certain covered repairs, but it typically won’t pay for oil changes, brake pads, wiper blades, tires, or other routine maintenance items.
Review the contract before you add coverage so you know what’s included, what’s not, and how to file a claim.
Questions to ask before adding coverage
Before you sign, ask:
- Is this product optional?
- How much will it add to my loan payment?
- How much will it add to my total loan cost?
- What specific situations are covered?
- What situations are excluded?
- Is there a deductible?
- Where can I use the coverage?
- How do I file a claim?
- Can I cancel the product?
- Is the product available in my state?
You don’t need to decide based on the product name alone. The details matter.
Bottom line
Caribou’s optional add-on coverage products can help with certain costs that may come up after you refinance, including a total loss, covered repairs, lost keys, tire damage, windshield chips, dents, and roadside issues.
But add-on coverage isn’t required, and it isn’t right for every driver. Compare the cost with the potential benefit, review the contract, and choose the coverage that fits your car, budget, and comfort level.
FAQs: Caribou’s add-on coverage
Is add-on coverage required to refinance with Caribou?
No. Add-on coverage products are optional. You don’t have to add them to refinance your car loan.
What add-on coverage does Caribou offer?
Caribou may offer optional products such as GAP waiver, Vehicle Service Contract, Powertrain VSC, All-in-One Coverage, Cosmetic Protection, Key & Remote Protection, and Mechanical Breakdown Insurance. Availability depends on eligibility, product terms, and state rules.
Can I add GAP coverage when refinancing a car?
You may be able to add GAP waiver when refinancing, depending on eligibility. It may be worth considering if you owe more than your car may be worth or if your loan balance is close to the vehicle’s value.
Is a Vehicle Service Contract the same as car insurance?
No. A Vehicle Service Contract may help with certain covered repairs. Car insurance usually helps with covered events such as accidents, theft, liability, vandalism, or weather-related damage.
Can add-on coverage increase my loan amount?
Yes. If the cost of the coverage is financed into your new loan, it may increase your amount financed and the total amount you pay over the life of the loan.
Can I cancel optional add-on coverage?
Cancellation rules vary by product and contract. Review the terms before adding coverage so you understand whether you can cancel, how refunds work, and who to contact.
