Car Gap Insurance and Vehicle Depreciation
One of the main factors that you should be aware of when purchasing a new vehicle is that new cars begin to lose their value from the minute you put the keys into the ignition and drive them away from the showroom. In a matter of seconds, your brand new investment has suddenly become a “used model” and its market value will have dropped considerably! Over the course of the ensuing months and years, the “book price” or market value of your car will sink further and further and this is referred to as vehicle depreciation. This level of depreciation is something that your comprehensive motor insurance does not protect you against and it is the main reason that Car Gap Insurance is bought by millions every year. By taking out a Gap Car Insurance policy, you are effectively plugging the gap between the value of your car when it was new and the market value at the time of your investment being written off in the event of it being stolen and never recovered or damaged beyond cost effective repair.
Is Gap Insurance Really Worth It?
It is common knowledge in the motoring trade that certain makes and model of car can quite easily lose up to two thirds of their initial retail value in just three or four years from the date of purchase.
With this in mind, a car costing £20,000 in a showroom could quite easily be worth just £8,000 or £9,000 in the not too distant future and as far as a comprehensive motor insurer is concerned, if the vehicle was involved in a serious accident or it was stolen and written off as a total loss then this paltry figure is the actual amount that would be paid out.
An affordable Return To Invoice Car Gap Insurance Policies give good return for a relatively small premium if you receive the full difference between the value of your car when you bought it and the value of your car at the time of the car being written off. In most cases this will quite literally be thousands of pounds and many motorists who have had to make a claim on their Gap Insurance policies will tell you that taking out the extra protection was one of the best decisions they have ever made.