USAA offers financial services to military members both past and present, as well as their families. The company is known for its competitive rates and top-notch customer service. If you’re affiliated with the military, USAA is a great choice for protecting your new vehicle.
Car Replacement Assistance
Although USAA does not offer new car replacement coverage, it does have something similar — car replacement assistance. If your car is totaled, this optional coverage will add 20 percent to the actual cash value (ACV) of your car when you receive your insurance payout. For example, if your car was worth $20,000 at the time of the accident, USAA will pay you $24,000. If you own your car outright, this coverage can help you buy a new vehicle in the event of a total loss.
DID YOU KNOW?
After five years, the average vehicle will be worth about 40 percent of its original sticker price.3
If you financed your vehicle, either through USAA or another lender, car replacement assistance serves as gap insurance. The difference is that gap insurance will cover the difference between what you owe on the car and its worth, while car replacement assistance will add 20 percent to your car’s ACV, whether that’s higher or lower than the loan difference.
To buy car replacement assistance coverage, you must carry collision and comprehensive coverage, and your vehicle cannot be leased. If you choose USAA and drive a leased vehicle, you will need to purchase gap insurance through your dealer (which can be expensive) or through a stand-alone gap insurance provider.
Benefits for USAA Auto Financing
If you financed your new car with a USAA loan, you have the option to purchase Total Loss Protection, which also functions like gap insurance. Total Loss Protection pays for the difference between what you owe on a loan and what your car is worth, up to $50,000. Unlike most other forms of gap coverage, Total Loss Protection pays for your collision or comprehensive deductible as well, for up to $1,000.
Total Loss Protection will not pay for a new vehicle if your car is totaled, but it will give you peace of mind that regardless of how much your new car depreciates after you buy it, you won’t be on the hook for your loan in the event of a total loss.
Additionally, if you haven’t purchased your vehicle yet, USAA offers competitive auto loans. Its new car loan APRs start at 3.19 percent, which is less than the average interest rate for a new vehicle of 4.07 percent, according to Experian.4
Discount for New Vehicles
USAA offers a special discount for new vehicles. To qualify, your vehicle must be less than three years old. Though USAA doesn’t disclose the exact amount of the discount, your agent should apply it to your policy automatically. The discount isn’t available in Puerto Rico.