Page 2 - AAA Now! – AAA Northway – Winter 2022

AAA
TM
INSURANCE SERVICES
Understanding the World of Gap Insurance
Preparing to purchase a brand-new vehicle? If so, we’ve got a couple of questions for you:
1. Are you rolling over an old car loan to the loan on a new car?
2. Are you financing for five years or more?
If you answered yes to either of those questions, you may want to consider purchasing Gap Insurance. Now you probably have a question for us – What exactly is Gap Insurance and how will it protect you? The simple answer is, it’s something you should consider before completing the purchase of a brand- new vehicle. Here’s why: Almost all vehicles lose 20% of their value within the first year of ownership.
At the time a car is considered totaled, meaning the damage to the vehicle is more than the car
is worth from a covered loss, Gap Insurance gets activated. It is meant to cover the difference between what your vehicle is currently worth (Actual Cash Value) and the amount you really owe to the bank. If your vehicle has a depreciated value equal to less than what you owe on the loan, without Gap insurance to help pay for the difference, you are responsible for the difference. In some cases, this discrepancy could be thousands of dollars, which
would become your liability. Let’s say you take out a loan of $30,000 for a new
car. Later, the car is totaled
in an accident and the ACV on the car is only $20,000. You currently owe the
bank $25,000. It is your responsibility to cover the $5,000 difference from what the car was worth at the time of the covered loss. Also, keep in mind it does not matter who is at fault in the accident, it’s your responsibility to satisfy the bank loan.
If you are financing for less
than five years or putting at least 20% down for the down payment of the new vehicle, Gap Insurance may not be necessary as long as it is not a vehicle that depreciates faster than average. You can check out the average value of your vehicle at any time with Kelley Blue Book at kbb.com.
In most cases in New York State, Gap Insurance can be purchased at the time the new vehicle is purchased and stays with the original owner for the length of the
loan on the vehicle. It is usually inexpensive and is added to the monthly payments. Keep in mind that if you lease a vehicle, you will most likely be required to purchase Gap Insurance.
Got questions? Have your auto insurance reviewed and get help deciding what coverage
is best for you. Contact our Insurance Agents at 866-222-0937 or AAA.com/Insurance.
by Eman Badr
We can handle all your insurance needs
As a member of AAA, you could save hundreds of dollars
Auto • Home • Snowmobile• RV • & more
Call today to learn how you may be able to save with your AAA discount.
Jeff Houghton Saratoga 518-831-1864
Ken Perinsky Vestal 607-338-1199
Stacy Gleason Queensbury 518-824-3808
Josh Cseh Schenectady & Halfmoon 518-831-1871
Greg Vanlieshout Plattsburgh 518-314-0034
Bruce Lant Director of Insurance
Penny Kovacs Administration/ Accounting
Davi Jodharam Agency Specialist
Schedule an appointment with an agent by phone, in-person or video call
1-866-222-0937 | AAA.com/Insurance
Property & Casualty Insurance products provided through AAA Northway’s insurance agency. Club Insurance Services LLC, 345 Bay Rd, Queensbury, NY 12804
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WINTER 2022
Now!