NYIADA Works on GAP Insurance Legislation
The New York Automobile Dealers Association said it has worked closely with Senator Neil Breslin ( D-NY) address an issue affecting New York members.
Senate Bill S3597 amends insurance and personal property laws to authorize service charges for gap waivers.
The bill allows New York dealers to offer GAP waivers to customers. It aims to combat the issue of the state’s dealers being unable to offer GAP without insurance licenses and pricing restrictions.
Under the current statutory scheme in New York, it is not economical for dealers to provide GAP waivers if, after a total loss of a vehicle, the outstanding balance owed by the consumer exceeds the vehicle’s value, according to NYIADA. Dealers are only allowed to charge the cost of the insurance to the consumer, which makes GAP incredibly difficult for New York consumers to obtain.
The New York dealer association said the problem had been exacerbated by used vehicle prices increasing by more than 31 percent in the past couple of years. Based on economic trends, prices are predicted to return to normal levels, which will cause the future value of today’s cars to decrease dramatically.
The association’s concern is that it may cause consumers unforeseen financial losses in the event of a total vehicle loss if they do not have GAP protection. This is extremely concerning to our New York consumers and their families.
“We praise Paula Frendel and NYIADA on getting this legislation introduced and look forward to continuing to support them in this initiative,” stated the NIADA in a release.