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.
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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.
Related Reading: Gap Insurance vs VRI Insurance: Protecting Your Investment
Do You Need Gap Insurance?
If you purchase or lease a new or nearly-new vehicle (up to four years old), this is the period of time your car depreciates the fastest. During this time you should seriously consider Gap Insurance.
Choosing The Right Gap Insurance For Your Car
Whichever method you choose to pay, there is a GAP insurance policy that is right for your vehicle, personal circumstances and financial position. GAP insurance is available for new and used cars.
If you paid cash for your vehicle, or paid a sizeable deposit, or if you financed it, Combined RTI Gap cover will pay out the shortfall between the cost of your vehicle and the market value at the point of claim, which is the amount your motor insurer will cover. This is cover that will protect you no matter if you use your vehicle for private use or for business.
If you leased your vehicle or it is under a contract hire agreement, Lease/Contract Hire Gap Insurance will cover you for the shortfall on your lease agreement, after your motor insurer settlement. If, for any reason, you change your vehicle within the first 90 days from the start date, we will also arrange to transfer your cover to your new vehicle without hassle or charge.
Can you pay Gap Insurance monthly?
If you’re looking for the convenience and affordability of a monthly payment option, Click4Gap offers you a non-financed agreement that enables you to pay a 20% deposit on purchase, followed by nine monthly instalments to cover the balance.
You won’t be signed up to a credit agreement, we’ll require no credit references or searches, and it isn’t subject to any changes in interest rates. For more on paying monthly for Gap Insurance click here.
Contact Click4Gap Today!
Looking to take out GAP insurance? We are here to help. Hop on our Live Chat, call us any time Monday to Friday, 9am to 5pm on 0208 819 3424, or Email us and we’ll get back to you during office hours.
Related Reading: Click4Gap Ranked #1 On MoneySavingExpert For Gap Insurance