Bill > A03706

This bill amends New York's insurance and personal property laws to explicitly authorize service charges for gap waivers in motor vehicle retail installment contracts. A gap waiver is a protection that covers the difference (or "gap") between the amount owed on a vehicle loan and the actual cash value of the vehicle in the event of a total loss. The bill allows creditors or assignees to charge a service fee in addition to the cost of gap insurance, with a maximum service charge of $750 for new or used motor vehicles. The service charge can be paid to the creditor, assignee, or a registered motor vehicle dealer. The bill clarifies that the gap waiver charge can be included in the calculation of payments due under the contract or in the vehicle's capitalized cost. It also specifies that gap waivers are only valid when motor vehicle creditor gap insurance is available from a licensed property/casualty insurance company. The changes aim to provide more flexibility and transparency in how gap waivers and associated charges are handled in vehicle financing transactions, while setting a reasonable limit on service charges to protect consumers.

Business and Industry

https://www.nysenate.gov/legislation/bills/2025/A3706