Information provided by AAA’s preferred Insurance partner: MAPFRE Insurance
There’s nothing like that feeling of purchasing a brand new vehicle and driving it off the dealership lot. The problem is that most new vehicles lose 20% of their value within a year.
So what happens if you get into an accident or your new vehicle is stolen and you need to file a claim during that first year timeframe? Having gap insurance will typically cover the difference between what your vehicle is currently worth and the amount you actually owe on the loan or lease.
Why you may need Gap Insurance
The Insurance Institute suggests purchasing gap insurance for your new vehicle if you:
- Made less than a 20% down payment
- Financed your vehicle for 60 months or longer
- Leased your vehicle
- Purchased a vehicle that depreciates faster than average
- Rolled over negative equity from an old vehicle loan into a new loan
How to purchase Gap Insurance
Some dealerships will offer you the option to purchase gap insurance. When you have your auto policy with AAA and MAPFRE, you also have the option to purchase loan/lease coverage, but your vehicle must include Collision and Comprehensive coverage.
Your AAA Insurance Agent can help you add loan/lease coverage to your policy and go over the costs associated with the coverage. With MAPFRE, there is a 5% charge to both the Collision and Comprehensive premiums for the endorsement.
AAA Is Here To Help!
If you need more information on Gap Insurance or if you need advice on whether Gap Insurance is right for you, our AAA Insurance Agents are here to help.